The DIY market is about to get a makeover and a rather exciting one at that, as Bunnings prepares to tackle the UK with its revamped Homebase stores.
With a new hungry and ambitious entrant about to make a play for the once predicatable UK home improvement market, it looks like things are about to get interesting.
Bunnings is poised to take on the mighty B&Q at its own game, after the former’s parent Wesfarmers acquired Homebase earlier this year.
Bunnings has already nailed its colours to its mast. It wants to move away from the very thing that set Homebase apart from B&Q and Wickes – out go the soft furnishings and in comes a harder DIY offer and a greater focus on trade.
And that plays right into B&Q’s heartland. So what shape is B&Q owner Kingfisher in as Bunnings gears up in the UK?
“Bunnings has already nailed its colours to its mast. It wants to move away from the very thing that set Homebase apart from B&Q and Wickes – out go the soft furnishings and in comes a harder DIY offer and a greater focus on trade”
We will find out this week as Europe’s largest DIY retailer updates the market on its second-quarter trading, covering the three months to the end of July.
If its first quarter is anything to go by, the retailer is in good shape, particularly in the UK. B&Q like-for-likes were up 3.6% while its more sophisticated multichannel stablemate Screwfix enjoyed a 16.2% surge in the same period.
And the group was buoyant about prospects too, following progress made on chief executive Véronique Laury’s five-year plan to deliver £500m in increased annual profits. While Kingfisher is a very European business now, reflected in its leadership team, its flagship UK business B&Q has reaped the early benefits of the strategy.
A new IT platform has been implemented and it is undergoing a much needed store revamp and rationalisation programme, shedding 60 stores, to better reflect changing shopping habits.
None of this is in response to Bunnings’ imminent arrival – the plans were already in place before the Australian pretender swooped on Homebase – but it certainly won’t hurt B&Q’s chances of fighting off this aggressive newcomer.
But Bunnings isn’t the only threat to B&Q. It is still unclear what impact Brexit will have on the housing market although early indications are it is already affecting house prices, in London at least, which could dampen transactions – something that could blow off course B&Q’s growth plan.
While Kingfisher’s second-quarter figures will by no means give us the full Brexit picture, prudent observers will be looking for any indication from Laury on whether the retailer has noted any cooling of consumer confidence in relation to big-ticket purchases for the home and what that might mean for the rest of retail.
Also this week…
The Retail Week Rich List has launched today – a list of the industry’s wealthiest 100 retailers in 2016. Click here to find out more.