NEWS
Disappointing sales, as heatwave and football keep shoppers away
The Office for National Statistics (ONS) reported that retail sales in June grew 2.9% on an annual basis, which fell short of economists’ forecasts of 3.9%. The figures revealed that month-on-month growth turned negative, with sales shrinking by 0.5% between May and June.
During June, both the amount
spent and quantity bought showed a negative contribution to growth at 0.3% 0.5% respectively.
Non-food stores had a tough time and provided the largest downwards contribution on the month for both the amount spent and quantity bought, at 0.4% and -0.6% respectively. Feedback from retailers suggest
that footfall in these sectors was affected by the warm weather and the World Cup celebrations. Commenting on the sales
figures, ONS senior statistician, Rhian Murphy said: “Retail sales grew strongly across the three months to June 2018 as the warm weather encouraged shoppers to buy food and drink for their BBQs.
“However, in June retail sales actually fell back slightly, with continued growth in food sales offset by declining spending in many other shops as consumers stayed away from stores and instead enjoyed the World Cup and the heatwave.”
Online was a slightly better
story, with household goods retailers reporting 3% month-
B&Q moves away from promotions with new pricing
DIY and garden chain, B&Q has announced plans to lower prices on 2,000 products across the business in a bid to deliver its ‘Do It For Less’ strategy and to make its pricing more transparent for customers.
B&Q said it is investing more than £100million in adopting an everyday low pricing strategy, which it believes will deliver “clear, transparent and trusted prices to benefit all customers”. The price drops, which include branded and own-branded products - will
Traditional bathroom retailers to benefit from DIY withdrawal
A new report on the UK bathroom retail market finds that sales have increased by £235million in the past six years, with a new boost for ‘full service’ bathroom retailers likely from 2019 following the withdrawal of B&Q’s Homefit installation services. The report from MTW Research is good news for bathroom retailers, suggesting that the DIY channel is set to “return to its roots as a DIY products retail channel”, and away from full service provision. Discussing the findings, director Mark Waddy said: “The ‘traditional’ bathroom retailer excels at combining design, supply, install and post- sales support as a ‘turn-key’ package. Other channels appear to be unable to compete with this level of excellence and are positioning themselves differently as a result.” The report showed erratic performance for bathroom retailers in recent years, but illustrates strong growth opportunities in the future for those able to identify and adapt to current market trends.
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offer an average saving on of 15% and there are plans for a roll out of further discounts following the initial 2,000-plus lines later on this year. As a result, the Kingfisher business will reduce the use of short-term pricing deals and discounts, including multi buys and reviewing loyalty scheme benefits, to enable investment in stable, low prices that will benefit more of its customers. B&Q commercial director Paul White explained: “People may enjoy hunting for the best deal
but, at the end of the day, there is much more comfort knowing that there’s one place where you can always get a low price. All customers want to have prices they can trust, and as industry leaders it’s our responsibility to look after their best interests by ensuring our customers get our most competitive price. B&Q first introduced a “simplified pricing strategy” across its kitchens offer in September 2014. Describing it as a successful move, B&Q said the use of promotional pricing in
Stax announces acquisition and registers as private company
Wholesale and cash and carry operator, Stax Trade Centres has announced a change of status, re-registering the business as a Private Limited Company, so that it will now be known as Stax Trade Centres Ltd.
“This is a significant move for the company as it frees the business from some
of the constraints that came with our previous status as a Public Limited Company,” said joint managing director David Hibbert. “The PLC status has been appropriate for us over the past 22 years, but the company has grown consistently to the point where it is now time for a change that will provide us with the freedom we need to continue
that growth. We have ambitious plans to grow the business and we need to ensure that we have the correct framework in place to implement those plans.” The move follows news that Stax had acquired the Groundsman brand from LG Harris range of household brooms, brushes and dustpans in a bid to strengthen its own- brand offer. The Groundsman brand, which was previously distributed by LG Harris, joins a growing range of Stax own brands which appear across the 45,000 product lines it offers to customers. Mr Hibbert reassures customers that the change to the company’s status will not adversely affect the relationships they have with Stax. “In fact the opposite will be true, as the change is good news for our customers,” he said. “It will provide us with far greater flexibility and enable us to have more direct control over the ways in which we respond to their needs.
on-month growth, up 15.8% on the same period last year. Online sales account for 12.2% of total retailing within the household goods category. In non-food overall, which includes other retailers and department stores, online sales saw month-on- month growth of 1.4% in June, up 20.8% year on year. A total of 14.4% of sales within the non- food category take place online. Immediately after the ONS published the figures on Thursday, July 19, the value of the pound dipped sharply against the dollar, dropping below $1.30 but recovered later in the day.
the category – something many kitchen retail competitors still employ – makes it difficult for customers to know if they are getting the best possible price. The retailer explained that the economies of scale afforded by being part of the wider Kingfisher group and the joint buying functions under the One Kingfisher transformation enable it to price products competitively, as well as building a “unique and unified offer”. The price drops announced includes a Bosch PMF 220CE Multitool, now 23% cheaper; a Flymo 1300w Hovervac 280 mower, now 17% cheaper; Cuprinol garden shades, matt wood, urban slate, now 32% cheaper; and B&Q 450W Hedge Trimmer, now 14% cheaper.
£1billion VAT bombshell for building supplies
A £1billion VAT bombshell will hit building supplies to the UK if builders merchants are forced to pay 20% VAT upfront on European timber and other materials.
Parliament voted this week to ban the UK from raising taxes bound for the EU unless the EU also collects tax for the UK. If the UK exits the EU without a mutually beneficial customs arrangements, UK businesses face having to pay 20% more for imports from the EU and will have to do this upfront before goods can leave EU ports. Building supplies will be particularly impacted, with a knock on effect on costs of construction and, potentially, the UK housing market. The Builders Merchants Federation, which is the trade body for builders merchants and their suppliers, has warned of serious and immediate implications for cashflow, costs and prices, given that the UK is heavily reliant on imports for materials such as timber, bricks and paint.
20 JULY 2018 DIY WEEK 5
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