Kingfisher anticipates DIY revival
Published: 26 June, 2013
Financial assistance for first-time homebuyers is likely to prompt a resurgence of DIY spending after several years of decline, Kingfisher's chief executive Ian Cheshire has said.
“If lending starts and these first-home buyers come back into the market, you will see DIY come back in,” said Cheshire. He went on to say that sales at Kingfisher’s B&Q should benefit within six months of a rebound in UK housing transactions.
Kingfisher is battling to reverse three straight quarters of falling same-store sales in the UK.
“Government measures look well aimed at reviving first-time buyers, and with them overall housing transactions and DIY spend,” said James Griznic, an analyst at Jefferies in London. “As a result, we expect a major UK like-for-like pick-up and margin expansion at Kingfisher.”
Cheshire has said that the falloff of DIY sales over the last five years reflects a dearth of first-time buyers, rather than any aversion to DIY on the part of British consumers. “The idea that DIY is shunned because people don’t know how to do it, I’m not sure I believe it,” he said.
This view is challenged by market researcher Conlumino that said last month that consumer interest in DIY is waning because shoppers lack the skills and inclination to, for example, replace that peeling wallpaper in the bedroom. Kate Calvert, an analyst at Cantor Fitzgerald in London, said there is a “marked shift from DIY to Do-it-For-Me”.
While small DIY projects are happening now, more-expensive items like new kitchens are “on hold”, said Cruz del Barrio, an analyst at data tracker Euromonitor, which estimates the British DIY market will not return to growth until 2014.