Focus DIY is poised to sign its first small-format store as it vowed not to be drawn into the DIY price war gripping the sector.

Chief executive Bill Grimsey revealed the retailer is close to signing a 15,000 sq ft store - with 12,000 sq ft of selling space - next to a Marks & Spencer Simply Food. Usually its stores are 25,000 sq ft to 30,000 sq ft.

Focus’s biggest rivals in the DIY sector - B&Q, Homebase and Wickes - all sell from sheds, with stores of up to 120,000 sq ft. Grimsey told Retail Week last year that there is scope for 100 “compact” stores.

“We are working on our first compact store, it is the way of the future,” he said. “People want to shop local, they do not want to be smothered with choice.”

He added Focus would not compete in the price war that was kick-started by B&Q this month, after which Homebase retaliated with its own aggressive advertising.

Grimsey said: “Focus will not be dragged into this arena. Price wars are quite damaging to the sector.”

Grimsey also said Focus would not be asking landlords for an extra week to pay rent, as it did in January and February, under the terms of its CVA, which was agreed last year.

Grimsey added that after getting off to a “very difficult start”, 2010 is likely to be a “tough year”.

The retailer has refitted six existing stores to its new Project Genesis format, as well as opening five new ones in the new format. It will refit a further 60 of its 180 stores in the next two years.

Focus is also trialling a coffee shop and is rolling out a new bathroom range to selected stores, as well as 60 how-to guides to all stores. It will relaunch its website next month and has also overhauled its Epos systems in stores.