Screwfix sales reach £1bn as it provides model for five-year Kingfisher transformation plan
£1bn-turnover Screwfix is to provide a model for Kingfisher businesses in a five-year transformation plan that aims to put customers needs first, both online and offline.
As a result, B&Q and Screwfix owner the Kingfisher Group said today that it expects to see annual profits rise by £500m.
The transformation plan will focus on reorganising the business to operate as one company, with one offer and one supply chain organisations. Until it has developed that unified customer offer it will expand only in a limited way, focusing on the Screwfix trade counter business, which saw sales grow by 26% in the last financial year to £1bn. Screwfix outlets will grow from 457 today to 600, including in Germany.
Screwfix is an Elite retailer in the latest IRUK Top500
research, and this week Kingfisher said that it would take Screwfix 'best in class' capability across the business. A new unified IT platform, piloted first at B&Q Ireland, will include core ecommerce functionality, with new search, checkout and mobile interfaces, as well as click and collect fulfilled from the store. Screwfix Germany is also expanding, with nine outlets now open, and a further nine set to open this year.
"We believe there is a significant opportunity to grow digital engagement with our customers and substantially increase sales with a seamless and stronger omnichannel offer," said Kingfisher in its full-year statement. "The home improvement industry today lags behind other sectors in digital sales penetration, with best in class retail today achieving only around 5% online sales. This reflects the complexity of home improvement projects and generally low levels of both customer knowledge and frequency of purchase. However, for the companies that have invested in digital capability, sales and digital penetration are growing quickly."
Kingfisher today said its figures for its latest financial year were good for 'business as usual', thanks to strong performances in the UK – driven by Screwfix – and in Poland. The group today reported sales of £10.4bn in the year to January 31 2016, down from £10.96bn at the same time last year. Top-line pre-tax profits of £678m stayed flat on last year's £679m. After one-off costs of £166m, pre-tax profits after exceptional items came in at £512m, 20.5% down from £644m last time.
In the UK, Screwfix sales grew by 26.3% to £1bn. Mobile sales grew by 100% and click and collect sales by 52%. B&Q, meanwhile, grew by 1.1% to £3.8bn. Kingfisher said productivity was benefitting from store friendly deliveries and the introduction of roller checkouts that improve the customer experience. Click, pay and collect is now available on more than 16,700 products, and online sales grew by 29% during the year.
Chief executive Véronique Laury said that its five-year plan would deliver dividends. "By putting customer needs first we will, by the end of that period, deliver a £500 million sustainable annual profit uplift, over and above 'business as usual'," she said. "It is an ambitious plan. However based on the solid progress so far, and the competence and enthusiasm of our colleagues, we feel very confident in our ability to deliver."
The plan also includes closing around 65 surplus B&Q stores in the current financial year.