Homebase more than holds its ground

Consumer spending in the UK has experienced a sharp decline in recent months. For this current year, the market research company Verdict is forecasting a 1.6 per cent sales loss for the DIY and garden segment. So far, Homebase has more than held its ground in this difficult market and is continuing to do so, aided by parent company Argos Retail Group (ARG) and its concentration on improvements to product range, pricing and store fixtures. The mezzanine concept is proving a success, and Verdict assumes that Homebase will be able to grow its market share by 0.5 per cent this year, whereas growth of no more than 0.1 per cent is forecast for the undisputed market leader, B&Q.
Homebase is pursuing ambitious goals: the total number of stores is expected to stand at 350 by March 2009.
The market share gain is a reflection of Homebase's efforts to upgrade the in-store experience for its customers. These include actions to improve customer service as well as stock availability, through close monitoring of key lines and out of stocks. Range reviews have also been undertaken in areas such as paint, tiling and lighting, which have consequently led to sales gains.
Homebase completed the last financial year (to 28 February 2005) with total growth of six per cent to £ 1.580 bn (€ 2.31 bn). Like-for-like growth amounted to three per cent. According to Verdict, this indicated a 0.2 per cent increase in Homebase's market share to 10.4 per cent.
Sales gains have been achieved in the area of paint, as well as in lighting and tiling.
The company is pursuing ambitious goals, with the aim of strengthening its market position still further. The total network of stores, which numbered 287 at year-end, is to be increased to 350 by March 2009. That means around 15 new openings per annum. The longer-term target is set at around 450 outlets.
The latest generation of mezzanine formats is delivering sales uplifts in excess of 15 per cent, according to the company. These stores offer improvements to layout, fixtures and signage, and the mezzanines are better lit as well.
A total of 111 stores had mezzanine floors at the end of the financial year, an increase of 44 on the previous year. The total had already reached 122 by June 2005, and at least 20 existing outlets should have a mezzanine floor by the end of this current financial year, along with most of the 13 new stores. The national roll-out of Furniture Direct is also being carried out in a parallel action.
The trial of the Furniture…