The owner of B&Q has said it expects lower profits than expected by analysts, as it waits for a housing market turnaround to spur a pickup in DIY demand.
Kingfisher, which also owns Screwfix and France’s Castorama, said on Monday that sales dropped by 1.8% for the year to the end of January, with particular weakness during the November-to-January period, when sales dropped by 4.3%.
DIY went through a big boom during the coronavirus pandemic lockdowns – remember when DIY stores were one of the few retailers allowed to open in the UK because of their role in essential maintenance. Huge sales from locked down customers prompted excited talk of a “new generation of DIYers”, but that does not appear to have materialised financially: Kingfisher shares are only marginally above where they were when the pandemic started.
Thierry Garnier, the company’s chief executive, said that in France “the market has been impacted by low consumer confidence”, and the company has been forced to cut costs, including a new plan to cut floorspace in Castorama stores.
But the big problem is housing markets in its main countries: the biggest spur to DIY is buying a new house. Garnier said: "Looking forward, we remain confident in the attractive growth prospects of the home improvement industry and our ability to grow ahead of our markets. In the short term, while repairs, maintenance and renovation activity on existing homes continue to support resilient demand, we are cautious on the overall market outlook for 2024 due to the lag between housing demand and home improvement demand."
Meanwhile, oil prices have risen by 0.6% on Monday, pushing back towards the four-month high hit last week amid concerns over supply.
Brent crude oil futures – the global benchmark – rose by 0.5% following the weekend market pause to peak above $86 per barrel, while the North American benchmark, West Texas Intermediate, rose 0.5% above $81.
Russia’s full-scale invasion of Ukraine in 2022 prompted one of the biggest global energy market shocks in decades, and Israel’s bombardment of Gaza in the months since Hamas’s attack on 7 October has translated into months of concerns that fighting could spill over into the rest of the Middle East and affect oil producers.
Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities, said (via Reuters): "Escalating geopolitical tension, coupled with a rise in attacks on energy facilities in Russia and Ukraine, alongside receding ceasefire hopes in the Middle East, raised concern over global oil supply."
The agenda • 9:30am GMT: UK consumer card spending analysis • 11am GMT: UK Confederation of British Industry retail survey (March; previous: -7 points)
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