Screwfix reported growing third-quarter sales this week, thanks in part to store openings – but it was the only Kingfisher brand to do so. The incoming Kingfisher Group chief executive said it would now look to fix short-term operational issues while focusing on long-term strategies including digital and a simpler business model.
At multichannel tool retailer Screwfix, sales of £477m in the three months to October 31 were up by 7.9% in total, and by 3.7% on a like-for-like measure that strips out the effect of store and business openings and closures. Its top-line sales grew as it opened seven new outlets and invested in price and in the customer experience.
Sister brand B&Q reported sales of £820m over the same period – down by 3.5%, (-3.4%LFL). Kingfisher said this came partly as the market softened and partly as it discontinued showroom installation services.
Screwfix and B&Q are both Leading retailers in IRUK Top500 research.
Overall, UK and Ireland sales of £1.3bn were up by 0.4% (-1% LFL) while wider Kingfisher Group sales of £2.9bn were down by 3.1% in total (-3.7% LFL). The steepest declines in sales were in the group’s Russian (-14.7%) and French (-6%) divisions.
Incoming Kingfisher Group Thierry Garnier said the quarter’s trading was disappointing and said there was much to do to improve performance. “My early assessment is that we have not found the right balance between getting the benefits of group scale and staying close to local markets. We are suffering from organisational complexity and we are trying to do too much at once with multiple large-scale initiatives running in parallel. Altogether, this has brought disruption to sales and has distracted the business from focusing on customers. In addition, we faced softer market conditions in our main markets during the period.”
Garnier said the priority would be to fix operational issues – particularly in IT and the French supply chain - and to refocus efforts. Some initiatives would be stopped or pause in order to focus on stabilising performance and trading.
“In parallel,” he said, “we are building a longer-term plan to refocus on our customers, simplify our model, embrace digital, and return our business to growth. I look forward to providing an update on the business and our strategic priorities in March, within our full-year results.”
Image courtesy of Screwfix