B&Q Reports Fall in Sales
B&Q, the DIY giant, has seen sales drop by 3.5% due to cautious consumers staying away from major purchases, like kitchens and bathrooms. However, Kingfisher, the parent company, is saying that they are on track to meet expectations for profits in the first half of the year due to achieving a higher gross margin on the sales, along with cutting costs and improving business in general.
According to the home improvement retailer, sales at stores open for a year declined 0.8% in the 10 weeks until July 10. Total sales were hit by a fall in demand for kitchen, bedroom, bathroom and other building products. There was also an impact seen with the introduction of 89 Trade Points, dedicated areas in B&Q shops that have their own manager and team, who cater solely to building trade. However, this was partially offset by a 2.6% increase in underlying French sales and a 0.8% rise in other international markets, like China.
Kingfisher says that gross profits increased in Britain and France due to moves to purchase more items directly from cheap manufacturing centres, as well as cutting costs. Ian Cheshire, the chief executive, said that they are confident the strength of the group, as well as their well founded self-help initiatives, will leave them in a good position to keep their progress going over the rest of the year. However, he added that they are staying cautious about consumer spending, which remains under pressure, and will continue focusing on vigorously controlling costs, targeting promotions to drive profitable sales and improving cash margins.