One of the biggest DIY retailers has warned that the sector is not big enough for the existing four big hitters to survive the recession and has raised the prospect of a price war.
Wickes managing director Jeremy Bird told Retail Week he expects consolidation as the housing slump takes its toll.
He said: “There isn’t room for Wickes, Homebase, B&Q and Focus in their present form.
I would be surprised if all four still existed in their present form in a year or two’s time. But Wickes will be one of the survivors.”
He added: “There might be another price war, which wouldn’t be a clever thing for the industry as no one can afford it. We wouldn’t start one – we would only follow where we had to.”
No comment on likely consolidation was available from B&Q or Homebase, but Focus chief executive Bill Grimsey said: “Focus is owned by Cerberus and is financially secure. We are going to survive.”
Grimsey believed any price war would not necessarily involve all DIY retailers. He maintained: “It’s very likely Wickes and B&Q will go head to head. B&Q is going after the white van man and Wickes is in the firing line.”
B&Q chief executive Euan Sutherland declined to comment on a possible price war, but said B&Q “will continue to bring customers market leading prices and is proud of our price promise”.
A Homebase spokesperson said the retailer “remains committed to providing customers with quality products at great value prices”.
All DIY retailers have suffered in the downturn. Wickes’ owner Travis Perkins’ preliminary results last week revealed the DIY chain’s core product like-for-likes fell 4.8 per cent last year. In its fourth-quarter update last week, Kingfisher posted a like-for-like decline of 5.9 per cent at B&Q.
Last year, Focus slashed 15 per cent of its workforce, while Homebase parent Home Retail wrote down£542m against the chain’s value last year.
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