‘Opaque’ outlook for 2013, warns Kingfisher

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B&Q’s parent company Kingfisher reported a drop in UK quarterly sales and said it is difficult to see when trading conditions will improve.

Kingfisher’s chief executive Ian Cheshire said: “The hardest thing at the moment is trying to call the outlook for 2013 which is just frankly opaque.”

He added that Christmas trading is likely to “bump along OK but probably come in a bit of a late rush”.

He said he would welcome measures to cut unemployment and assist the housing market when Chancellor George Osborne’s announces his autumn statement next week.

Kingfisher has tried to offset weak demand by buying more goods centrally and from cheaper manufacturing centres such as China.

B&Q in the UK and Ireland reported a four per cent drop in like-for-like sales in the 13 weeks to October 27, an improvement on the six per cent slide in the first half of the year when dire weather hit sales.

The group saw higher sales of home improvement products as more people entertain at home. Sales of built-in fridge freezers rose 13 per cent and built-in microwaves were up 57 per cent.

The division reported a 1.7 per cent rise in retail profits to £45m, while the wider Kingfisher group, which also owns tools supplier Screwfix as well as Castorama and Brico Depot in France, recorded broadly flat retail profits of £257m.

Freddie George, retail research analyst at Seymour Pierce, said the like-for-like sales were worse than expected and implied “a markedly weakening trend through the period”.

The group has been leading cost cutting initiatives and driving sales of showroom products such as kitchens and bathrooms in an effort to help boost trade.

Kingfisher group total sales rose 0.8 per cent to £2.7bn.

Like-for-like sales in France fell 2.8 per cent and international stores, which include China and Russia, dropped 0.8 per cent.

Screwfix reported an 11 per cent increase in total sales to £149m in the period despite challenging trading conditions in the smaller tradesman market.

The chain is benefiting from the roll out of new outlets, the success of ‘click, pay & collect’ and a redesigned catalogue.