B&Q owner Kingfisher has said it is managing inflationary pressures amid “resilient demand” for DIY despite the cost of living crisis in the UK and other markets.
The retailer, whose other UK brand is the hardware trade supplier Screwfix, said sales had remained at elevated levels seen during the coronavirus pandemic, and that it was confident enough about its outlook to launch a £300m share buyback.
During the first coronavirus lockdowns Kingfisher’s sales soared as customers were mainly stuck at home but DIY stores were permitted to stay open to allow people to carry out essential maintenance.
In a trading update on Monday, Thierry Garnier, the Kingfisher chief executive, said the company had retained a “significant proportion of the increased sales during the pandemic”.
Like-for-like sales in the February to April quarter were 16% above the same period in 2019 at £3.2bn, although they dropped back by 5.8% overall compared with the boom in 2021. UK and Ireland sales were down by 14% compared with the year before, but were up nearly 17% on 2019, with kitchen, bathroom and storage products among the bestsellers at B&Q.
Kingfisher’s share price gained 2.8% on Monday morning, making it the top riser on the FTSE 100.
The company expects DIY demand to be resilient in the coming months despite the expectation that consumer spending will drop as household budgets are squeezed by inflation, particularly in energy prices which have soared in part because of Russia’s war on Ukraine. Garnier has previously argued that “home improvement is not a bad place to be in a crisis”.
Kingfisher said it was “mindful of the heightened macroeconomic and geopolitical uncertainty that has emerged since the start of the year”, but added that it will look to increase its market share. It left profit guidance unchanged at £770m for the full financial year.
One of the big challenges across B&Q and Screwfix since the pandemic has been managing the disruption to supply chains and related increases in costs. The company argues that its scale means it has a strong negotiating position with suppliers, and it also allows it to offer lower prices in its own-brand ranges.
Garnier said: “We continue to effectively manage inflationary and supply chain pressures. As a result, our product availability is now very close to ‘normal’ levels across all our banners, and we continue to deliver value for our customers through our own exclusive brands and competitive prices.”
Kingfisher recently raised the wages of its lowest-paid staff at B&Q and Screwfix by 6.5% and 5.4% respectively.
