DIY homewares group Kingfisher – owner of B&Q and Screwfix in the UK along with a range of similar stores in France – has seen ecommerce surge in May and June as click and collect and delivery come into their own with stores reopening.
With stores closed from mid-March the retailer has seen ecommerce more than fill the gap. According to its figures, online sales across the group surged by 202.1% in May and 225.2% in June, driven by a massive up-tick in click and collect.
Initially, as lockdown started, the group saw sales plummet. However, limited reopening, coupled with good weather prompting many consumers to consider spending lockdowns redecorating indoors and out, saw sales rapidly pick up from mid-April.
Store sales have also started to surge grow too as shopper confidence starts a tentative return In May, like-for-like sales were up 14.3%, with UK and Ireland sales up by 15.5%. In June, group sales grew by a further 25.1%, as lockdown restrictions started to ease. UK and Ireland sales for the month grew 25.9%.
This surge, coupled with a round of cost cutting measures, will see half year profits actually come in ahead of last year. The tough conditions, however, meant that the group declined to issue any guidance on how it sees the second half of 2020 going.
What they say
In a statement the company said: “Based on the strong sales seen to date in the second quarter, combined with cost reductions benefiting H1 (some of which are non-recurring), the Company anticipates its half year adjusted pre-tax profit to be ahead of prior year.”
“Second half visibility remains low given uncertainty around Covid-19 and the wider economic outlook. As such, no specific financial guidance is provided for the full year 2020/2021,” the company said in a statement.”
Commenting on the results significance, Michael Schirrmacher, MD at Bloomreach, says: “Kingfisher’s interim results released this morning should come as no surprise: one of the biggest winners of the lockdown has been the DIY segment, fuelled by Britons electing to spruce up their households as they followed the government’s guidance to stay at home for months. We have been analysing various ecommerce categories since the start of the lockdown and found that DIY has been a consistently popular category since April with sales up 102% and traffic searches up 70% YoY. We anticipate this trend to endure as consumers continue to invest in their homes while they spend more time indoors.”
Schirrmacher adds: “Kingfisher also invested heavily in its digital offerings over the period to continue to serve customers that couldn’t visit stores for months. This smart move from the company forms part of a larger trend of retailers prioritising their online strategy in order to succeed in a market that has changed radically due to the pandemic. In fact, in the State of Commerce Experience research study, conducted by Forrester and commissioned by Bloomreach, 90% of customers say their behaviours have changed as they avoid physical stores and buy exclusively online or as much as possible, while half of customers are shopping on digital channels for products they’ve never bought online before. This highlights the opportunity that is available to retailers: investment into online and social channels is now crucial in increasing customer retention at a time where the market is more competitive than ever, and consumer confidence is low.”