Builders merchant Travis Perkins’ has reported a tough start to the year at its retail division, including DIY chain Wickes, but the business has gained market share.

Travis Perkins said: “With the rate of VAT returning to 17.5% on January 1 2010, the strong market trends seen as 2009 closed were rapidly reversed.

“The hike in VAT also seemed to signal a change of sentiment amongst consumers and this, combined with poor weather through until March, caused a number of lost days trading and meant that the retail market started the year poorly.

“Although market trends improved in the second quarter, retail volumes were down overall for the first half-year compared to last year. In 2010, with no further interest rate reductions available to cushion consumers from the effect of continued high inflation, the retail DIY market has contracted. With price inflation running at about 3.4% we estimate retail market volume is down by about 3% over the first half of 2009.

Wickes’ sales rose 1.7% in the six months to June 30, when like-for-likes per trading day slipped 0.5%. Sales of core products were down 3.3% but kitchens and bathrooms rose 11.6%. However growth in kitchens and bathrooms slowed in the second quarter. Sales at the Tile Giant chain rose 3.5% like-for-like.

Travis Perkins reported: “The momentum built up by our retail initiatives and store expansion over the last two years has meant we have grown our market share in gross terms.” It is expected that the retail division “can outperform the market on a long-run basis.”

Travis Perkins generated an 18.6% rise in pre-tax profits to £107.2m on sales up 4.7% to £1.52bn.