Kingfisher reports a strong performance for its Q2 to date (11 weeks to 18 July), boosted by ongoing elevated demand for home improvement as consumers stay home and the phased reopening of stores since mid-April. Following strong sales growth and cost reductions, the DIY specialist expects pre-tax profit for its H1 (to the end of July) to be ahead of last year, setting it apart from most non-essential retailers. Kingfisher’s share price rose 11% this morning as a result.
The DIY specialist recently outlined its new Powered by Kingfisher plan, which will focus on seven key strategic priorities, including growing online sales, partly through shifting to store-based picking and fulfilment. Ongoing investment in online is wise, given that many DIY shoppers will continue to favour this channel for the foreseeable future. A recent GlobalData survey revealed that almost one-third of shoppers (31.6%) say they would not consider visiting a DIY store that has reopened due to hygiene concerns and the prospect of having to queue.
Kingfisher also plans to experiment with new store concepts, including concessions and smaller-format stores (though no reference was made to its small-format GoodHome fascia, which first opened in the UK in May 2019). Kingfisher’s new store concepts will help it compete with Homebase, which has concession partnerships with brands, including Silentnight, Ponden Home and Bathstore, and recently opened its first two DECORATE by Homebase smaller-format stores.