B&Q to 'capitalise on confinement' as locked-down consumers improve their homes

Analysts believe that B&Q owner Kingfisher will have continued to “capitalise on confinement” as locked-down consumers spend more time improving their homes.

Shoppers returned to B&Q stores in Scotland during the summer following the initial lockdown as stores were classified as essential. Picture: Lisa Ferguson

The group, which is due to release its full-year results this week, has benefited from the home-working revolution as people are forced to find new ways of using space in their homes. Its essential-status stores have also remained open during lockdown.

However, underlying sales growth eased towards the end of 2020, and City experts say it is unclear what the impact of fresh lockdowns will have on the business.

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Susannah Streeter, senior investment and markets analyst at financial services firm Hargreaves Lansdown, said: “As people have rolled up their sleeves and got stuck into home improvements during lockdowns, DIY retailers have cleaned up, with online sales of household goods up 73 per cent during 2020.

“With DIY becoming almost a national past time, it’s boosted the fortunes of B&Q and Screwfix owner Kingfisher which has been on a recruitment drive for more staff to keep up with demand.

“The pandemic seems to have prompted the turnaround that was eluding management last year as it struggled with weak sales in France, particularly for its Castorama business.”

She added: “Underlying sales growth slowed towards the end of 2020, and it’s unclear exactly what the impact of fresh lockdowns will have on the business.

“Kingfisher is likely to have continued to capitalise on the confinement but there is a risk that people will become more fearful of spending even more on their homes given the uncertain economic outlook.

“Kingfisher’s recent announcement about the expansion of Screwfix might be a good indication of the expectation the company has about future sales. The chain is planning on opening another 50 stores in the UK and Ireland, focusing on opportunities in inner cities and rural areas.”

In December, the B&Q owner became the latest big retail name to return millions of pounds to government coffers.

Kingfisher said it was eligible for business rates relief of up to £130 million in the UK and Ireland because of decisions taken to help out firms during the pandemic.

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