Kingfisher sets 1,000-store Screwfix target

B&Q owner Kingfisher is ramping up its Screwfix store expansion drive and expanding its “compact store” property strategy, as the group continues to cash in on the DIY boom. The group, which owns B&Q and Screwfix in the UK and Castorama and Brico Dépôt in overseas markets, has set a medium-term target store count of 1,000 across the UK and the Republic of Ireland for its Screwfix brand, upping this from a previous equivalent of 900. This had already been revised from 800 stores earlier this year in March. The retail group opened 20 new stores in the six months ending July, taking its total to 741. It has launched more than 70 during the year, nearly double the amount opened in the same period last year (38). Screwfix will make its physical store debut in France next year. Kingfisher is also on track to open seven new stores in Poland by the end of its financial year. The news comes as the retail group reports a 62% leap in pretax profit for the first half of the year, rising to £669m. But it also said it faces “significant operational pressures” arising from the pandemic, including product supply and higher cost price inflation from certain raw material and freight costs. Separately, Kingfisher has reduced its rent bill at 10 B&Q stores by nearly 25% during the period, with “improved lease terms”. It has identified “significant opportunities” to further reduce property costs through renegotiations. Expanding with smaller stores The B&Q owner, which has around 1,420 stores, is pressing on with its plans to increase overall store count over the next few years while reducing average sizes. It will open more “compact” stores measuring under 21,500 sq ft, rebalance its store opening programme to focus on “medium-box” locations ranging between 21,500 sq ft and 86,100 sq ft, and rightsize “big-box” formats of more than 86,100 sq ft. Kingfisher said stores remain a “critical feature” of the home improvement market, playing an “integral role” with click-and-collect and home delivery points. Demand for online capabilities will shrink these to “smaller and more localised stores”. The group completed two B&Q rightsizings in Canterbury and Watford in recent months, where it has achieved a circa 25-30% reduction in space taken over by discount retailers. Kingfisher said that following the learnings from its rightsizing trial programme, it “will establish a plan to target a larger sub-set of stores over the longer term”. Trialling new concepts After testing six compact store concepts last year, the DIY retail group opened five more B&Q locations including three high-street stores in Wandsworth, Tooting and Wood Green, and two store-in-store concessions at Asda supermarkets in Roehampton and Edmonton. It will trial four additional Asda concessions for its 2021-22 financial year, along with further tests of “ultra-compact” stores. Thierry Garnier, chief executive of Kingfisher, said: “With the business in a strong position, we are now ready to accelerate our investments to capitalise on the attractive growth opportunities available to us.” He added: “Our industry is benefiting from new trends that we believe will be supportive over the long term. These include people spending more time working from home, the emergence of a new generation of DIYers, the need for greener homes, and a strong housing market. Kingfisher is well placed to capitalise on these trends and deliver sustained outperformance.” To send feedback, e-mail pui-guan.man@eg.co.uk or tweet @PuiGuanM or @EGPropertyNews Photo: Maureen McLean/Shutterstock