IREU 500

How B&Q and Screwfix owner Kingfisher is transforming its business through digital

We took a look at Kingfisher Group’s full-year figures to find out what they said about the group’s digital strategy. Kingfisher Group owns UK retailers B&Q [IRDX RDIY], a Top50 retailer in IRUK Top500 research, and Leading retailer Screwfix [IRDX RSCR]. It also owns IREU Top150 retailer Castorama and Brico Dépôt in France. Here are the highlights.

Overall figures

Kingfisher Group reported sales of £11.2bn in the year to January 31 – 7.5% up on the same time last year. Pre-tax profits of £759m were 48.2% up on last time.

Véronique Laury, chief executive, said: “It has been a very productive and important year, a year which has again delivered sales and profit growth. I am really pleased that our performance has been achieved alongside delivering the key first year strategic milestones of our ambitious five year transformation plan, based on creating a unified company where customer needs come first. We have learned a lot and are aware of the challenges. We are well set up for next year and beyond as the level of activity increases.”

Transformation plan

Trade counter business Screwfix is one of the only areas where Kingfisher plans expansion while it works to unify its customer offer across the business in a five-year transformation plan that is expected to lift profits by £500m a year. It is currently in the second year of the plan. The strategy includes delivering a single supply chain and unifying the range as well as rolling out a single IT system to underpin its retail brands’ stores, back office and supply chains. This has now been achieved in B&Q in the UK and is now underway at Castorama.

A digital ‘brilliant basics’ ecommerce platform is being built for B&Q first, benefiting from what works well on the Screwfix platform.

A third prong of the strategy includes making operations more efficient. The retailer has closed 65 B&Q stores.

B&Q

Total B&Q sales of £3.7bn were 3.3% down on the same time last year as it closed 65 stores, but like-for-like sales, which strip out the effect of those closures, were up by 3.5%. Of that, 2.6% was put down to a transfer of sales from closed stores. Digital sales grew by 45%. The retailer now offers a click and collect service on more than 31,500 products.

Screwfix

Screwfix sales of £1.3bn were 23.2%, following the opening of 60 new outlets, taking its total estate to 517 stores. Like-for-like sales, which strip out the effect of those openings, were 13.8% up on the previous year. Digital sales grew strongly: click and collect sales rose by 60%, while those transacted via mobile devices were up by 124%.

Europe

Total Castorama sales fell by 2.4% to £2.3bn, while Brico Dépôt sales of £1.9bn were flat on last time. Kingfisher’s roll out of a unified IT platform is expected to be completed in 2017, enabling it to build a strong digital offer starting with a focus on mobile and site search.

Brexit

Véronique Laury said: “Looking forward, the EU referendum has created uncertainty for the UK economic outlook and we remain cautious on the outlook for France, especially in light of the forthcoming presidential elections. Looking longer term, supported by the expertise and energy of our colleagues, we remain confident in the size of the prize and our ability to deliver the plan – both the financial benefits the transformation will unlock and the stronger business it will create.”

Mentioned in this piece…

B&Q

B&Q

IRDX: RDIY

B&Q is the largest home improvement and garden centre retailer in the UK and Ireland. The company retails through hundreds of stores and its eCommerce site, diy.com. It is a wholly owned subsidiary of Kingfisher plc. (more…)

Screwfix

Screwfix

IRDX: RSCR

Screwfix is an in-store, direct and online retailer of trade tools, accessories and hardware products. (more…)

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  • Internet Retailing