Travis Perkins’ retail arm, which largely comprises Wickes, experienced a like-for-like decline of 1.4% last year as it was hit by a fall off in demand in kitchens and bathrooms.

The retailer said that “poor consumer confidence and lower levels of disposable income have had a detrimental effect on our retail businesses in 2011”.

Travis Perkins said the new financial year has “started satisfactorily” despite like-for-likes in the retail division worsening, falling 3.1% in the first seven weeks of the year.

On an ordered basis they were up 0.9% in the seven week period. 

The retail division’s adjusted operating profit tumbled by £14m to £45m last year “as lower sales and increased overheads in Wickes, due to investment in store expansion and reorganisation costs, outweighed the benefits of an improved gross margin”.

Gross margin improved 1.3% due to a combination of “improved purchasing terms, direct sourcing and lower sales incentives” in the year to December 31. However adjusted operating margin fell from 5.9% to 4.5% as overheads increased due to higher marketing spend, the initial costs of opening Focus stores, and restructuring.

Revenue at the retail arm was up 1.5% to £1bn due to the expansion from new sites, which increased sales by 2.9%. 

Travis Perkins said the OFT had contacted the group this month raising concerns regarding its acquisition of ToolStation this year. Travis Perkins said it was “surprised” it had been contacted by the OFT, adding: “We are in the process of responding to the initial enquiry and are confident that the issue will be satisfactorily resolved.”

The retail division completed the acquisition of ToolStation this year, purchasing the remaining 70% of issued share capital it did not already own.

The group expects the markets it operates in to “remain subdued” in 2012 and expects the consumer sector “to decline by a more substantial amount as consumer confidence remains low, unemployment rises and disposable income remains under pressure”.

This year Travis Perkins said it will leverage self-help initiatives including the incremental return from the 13 ex-Focus stores acquired 2011. Focus collapsed into administration in May.

Travis Perkins chief executive Geoff Cooper said: “With the prospect of the market softening as we go into 2012, the continued improvement in our offer to customers and gains from strategic developments will be the engine of this growth. Our management team has proven itself capable of performing well in tough markets and outgrowing our competitors.  We look forward to another year of solid progress.”