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NEWS


Travis Perkins announces trading update report


Over the last six weeks,


Travis Perkins has continued to open more of its branches under the safe, social- distancing working practices, in conjunction with customers, suppliers and construction industry bodies, as well as the UK Government. The Group volumes in May


were around 60% of prior year with an improving trend throughout


the month. The


Group’s weekly volume run rate is now around 85-90% of prior year with particular strength in Wickes’ core DIY ranges and in Toolstation, with both businesses demonstrating improving like-for- like growth versus 2019, with


performance underpinned by their strong digital capabilities. Across the Merchanting and Plumbing & Heating businesses, volumes are now around 80% of prior year with more marked differences between the businesses depending on the customer category mix and also with some regional variations. The


General Merchanting business is


operating well, whereas


trading in Plumbing & Heating is recovering more slowly as a greater proportion of plumbing work requires tradesmen to work in people’s homes. However, while there has been a significant recovery in trading volumes in


recent weeks, it is


evident that the UK is facing a recession and this will have a corresponding impact on the demand for building materials during 2020 and 2021.


Following discussions with colleagues, the Group has commenced a consultation process regarding the closure of around 165 branches across


the overall branch estate, representing approximately 8% of the Group’s network. In addition, the Group is consulting on above-branch roles in the distribution, administrative and sales functions. In total, the Group expects to reduce the number of colleagues by around 2,500 or approximately 9% of the workforce. Branch


closures will be


concentrated in the Merchant businesses, in particular the Travis Perkins General Merchant, focusing on small branches where it is either difficult to implement safe distancing practices, or where marginal profitability will be eroded in a reduced volume


Signs of recovery in DIY industry Consumer spending


contracted 26.7% year-on- year in May, but positive signs are seen as more sectors adapt to social distancing restrictions to keep their doors open. Data from


which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essential items grew slightly by 0.9% This was bolstered by a 24.5% rise in supermarket spend – which increased to 27.0% in the week preceding the VE Day weekend as Brits made the most of the sunny bank holiday. The upsurge in supermarket expenditure helped to offset a 49.7% fall in fuel.


Spending on non-essentials


decreased by 36.9% year-on- year, with department stores and clothing declining 44.5% and 42.4% respectively. However,


Barclaycard,


this drop was less steep than last month’s, which saw non- essential spend contract by 47.7%, reflecting a slightly more positive outlook for UK retailers ahead of some stores opening on 15 June. While


eating and drinking


saw an overall decline of 70.3% year-on-year, there were signs of a recovery as May saw a smaller fall in spending than in April (-79.%). This coincides with more restaurants, pubs and cafes being able to offer delivery and takeaway services. More than one in ten (14%)


Brits are now buying food and drinks from a pub, and 10% are purchasing takeaway coffee regularly. In


an ongoing trend,


consumers have remained loyal to local specialist food and drink outlets, such as greengrocers and independent convenience stores, with the category seeing


Robert Dyas announces store reopening plan


Robert Dyas begun a phased return to the high street from Monday 15 June, with 11 stores in the South-East leading the way and reopening their doors. Further stores will reopen from


Wednesday 1 July, when Click & Collect will also be reactivated, following the successful and safe rollout of the first phase. Robert Dyas stores will be


6 DIY WEEK JUNE 2020


remodeled in order to facilitate the Government’s social distancing guidelines and visual reminders will be placed at key points for the attention and safety of both colleagues and customers. New measures will include:


• Restrictions on the amount of customers allowed in store • Customer service hosts on-hand to support with any queries


a growth of 42.5% – the highest increase since restrictions were introduced. Consumer


spending


contracted 26.7% year-on-year in May, but positive signs are seen as more sectors adapt to social distancing restrictions to


• Directional signage for one-way flow to ensure social distancing • Use of contactless payments where possible • Increased frequency of cleaning and sanitising • Perspex screens at till points • Quarantining returned goods for up to 72 hours


• Sanitising stations available for baskets


• PPE available for staff including masks, gloves and personal sanitiser The


business will


any learnings from colleagues during phase one are taken into account and used to refine


ensure


keep their doors open. While Home Improvement


& DIY, a category which includes garden centres, saw a small annual dip of 3.2%; this represented a significant uptick from April which saw a sharp 42.7% drop year-on-year.


safety measures for the secure reopening of remaining stores. Throughout the crisis and while the stores have been closed, the Robert Dyas digital and warehouse teams have worked hard to continue operating safely with an online presence for the 148-year-old chain, enabling customers to purchase items for home delivery. Stores that will initially reopen on Monday 15 June are: Chiswick, Ealing, Richmond, Henley, Wimbledon,


Thame,


Amersham, Haywards Heath, Dorking, Petersfield and Hemel Hempstead; once again


environment. The Group continues to maintain a strong liquidity headroom position with a robust balance sheet. Actions to reduce the monthly operational cash burn rate and to carefully manage working capital have continued. Customer collections remain robust, enabling the Group to maintain its committed payments to suppliers throughout the crisis period, whilst also preserving a strong liquidity position. At 12 June, the Group had cash deposits of £363m, and taken together with the undrawn £400m Revolving Credit Facility, overall liquidity headroom of £763m. The Group continues to work closely with its relationship banking syndicate. Despite the strong liquidity position, given the impact of the Covid-19 crisis and the resulting lockdown period on the Group’s income statement for 2020, the Group has taken the prudent step to agree a relaxation of


the covenants for the test


dates at the end of June and December 2020.


Encouragingly for these


retailers, 27 per cent of Brits are now planning a trip to the garden centre or DIY store, signalling a likely continued upwards trend in spend for this category in the weeks ahead. Online purchases at specialist


retailers – including sports and outdoor outlets – and general retailers was another bright spot this month, rising 96.3% and 85.8% respectively as people bought items to help them exercise and keep fit while gyms remained closed. While consumer spending


is increasing month-on-month across some retail categories, overall confidence in the UK economy remains low – indicating that the road to recovery may be a long one.


Just 20% of UK adults feel positive, though those aged 18-34 are noticeably more upbeat than those aged over 35. More than two thirds of Brits (67 per cent) remain confident in their households, with 37 per cent of those citing having enough savings to support them as a key reason for this positivity.


becoming part of the community serving customers with all the essentials they need for the home and garden.


www.diyweek.net


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