B & Q home improvement profits plummeted

In the first quarter of the world's leading international decorative building materials retail group, B&Q, its profit fell by nearly 30%. Its parent company, the British Kingfisher Group, believes that it was caused by bad weather and sluggish consumption in the first quarter, but analysts believe that B&Q's business structure has a problem. They believe that the European home improvement DIY model is "dead". However, this view has not been recognized by Kingfisher executives.

Hugo.com learned from the report of the British newspaper The Guardian on May 30th that Ian Cheshire, executive director of B & Q's parent company, Kingfisher Group, said on Thursday: "The situation in this quarter was unexpected. In March and April, bad weather straddled France, Britain, and Poland, affecting seasonal sales and passenger traffic.

Reported that in the United Kingdom, B&Q's greenhouse sales fell by 52%, and bedding sales fell by 8%.

Kingfisher Group believes that B&Q's first-quarter profit fell by nearly 30% due to weather reasons. The group is still optimistic that the British real estate market will still pick up during the rest of the year, and real estate demand will affect the decorative building materials products. The important factor of sales.

Cheshire pointed out that there are more and more people in Britain consulting home buyers. At the same time, there are signs that the French government is working to solve the housing market. “Although the trend of market recovery is still not clear, there is already encouraging news,” he said.

However, analysts disagree. Kate Calvert of Cantor Research believes: “We are concerned about the just-new reports. Compared with last year, it is easy to see the weak performance of the market. This means that Kingfisher Group faces real structural problems, not only It is only extreme weather.In the UK, sales of DIY (home improvement) have been declining over the past decade. Obviously, the market is changing from DIY to DMF (manufacturability design)."

However, Cheshire does not agree with these views. "I can't accept the saying that DIY is dead. If I see a change in the sales model, such as the fact that sales of flowerbed plants have become less, this is not because of the shift in the structure of the industry, but simply because no one wants to go to the garden."

He said that the Kingfisher Group has also provided DMF customers with continued expansion of the Screwfix and new family budgeting services, which can provide customer access to review the pre-agreed prices of local merchants. On the contrary, Hitcher believes that one of the major reasons for hitting the British market is the gradual increase in the competitiveness of discount stores, which forces the Kingfisher Group to compete in the low-end market.

He believes that all DIY shops in the UK still have a large retail space, while B & Q has also made progress in this area.

In the 13 weeks before May 4 this year, B&Q's sales fell 4.2% year-on-year, while total sales fell 0.4% to 2.6 billion pounds. Retail profit fell 28% to 114 million pounds. Exaggerating the impact of weather factors in the short-term, resulting in the data is lower than analysts' expectations. But not only the weather, Kingfisher Group believes that consumer confidence in the three major markets of the UK, France and Poland continues to suppress its sales. Its companies will increase sales by cutting profits and lowering prices, instead of short-term promotions in markets such as the UK, Russia, and Poland.

Cheshire thinks: "If you don't enter your store, you don't have enough discounts, so we would rather provide targeted low prices throughout the year."