Bleak outlook for UK retailers

DIY sales remained soft in the United Kingdom last year and are soft again so far this year, the sixth in a row. They are not expected to recover until 2016, according to Peter Stone, Executive Director for DIY of the British Home Enhancement Trade Association. He outlined the UK’s current dismal DIY picture in a presen­tation during the National Hardware Show in Las Vegas in early May. Unemployment remains high at 7.8 per cent in the UK, though far better than it is in Spain, where it exceeds 20 per cent, Stone noted. The ongoing dismal business outlook is self-feeding to some extent, as retail businesses close and empty stores in shopping centres and in High Streets throughout the country make consumers doubly cautious about buying. It isn’t only the DIY sector which is hurting. Some major well known chains in other fields have been closing, including Comet’s 236 appliance stores and Peacock’s 611 clothing stores. When Focus closed its 175 stores two years ago, it left the UK with only three large DIY chains – B&Q, Homebase and Wickes – and none of them are doing very well this year. Even gardening, one of the strongest segments of the UK consumer market, is down 10.8 per cent this year, he noted, but this is partly the fault of bad spring weather. B&Q is off 3.6 per cent and the other two chains are down even more – Homebase down 5 per cent and Wickes down 5.6 per cent. Only Screwfix, another division of B&Q’s parent, Kingfisher, is continuing to open new stores. 60 units were opened last year and another 50 are planned this year, though same-store sales are off slightly. Admittedly, this is on the one hand a small-store format and, on the other, the expan­sion of Screwfix is closely linked to Kingfisher’s efforts to achieve a leading position in online shopping as well. Conversely, B&Q is downsizing some of its larger stores and has been contem­plating the closure of certain locations. Independent hardware stores, most located on the High Streets of towns and villages, are suffering as well. Today, Stone explained, there are some 3 500 survivors in this category. These, together with builders’ merchants and garden centres, offer UK consumers a choice of where to buy DIY products, in addition to the big three. Download: