UK Retail – Time For a Spring Clean or a Spot of Do It Yourself?
We now take a look at the trends for the approaching Easter weekend.
A 4 day weekend, a recovering housing market and only a few weather warnings issued….. surely this can only mean one thing-DIY and all the shopping that goes with it. So will the DIY chains be in for an “eggstravaganza”* this year or will they be left with “egg on their face”?
Easter weekend 2014 evidenced strong consumer spending attributed to a surge in the housing market and a more confident economic outlook coupled with some glorious sunny weather. Many retailers are “eggerly” anticipating the first bank holiday weekend of 2015 as traditionally this boosts shops, restaurants and hotels as well as their suppliers.
It is estimated that 10 million plants, 1million bags of composts and approximately 20,000 barbeques were purchased in B&Q alone last Easter. However recent news suggests that B&Q may be more “shell” shocked and “beaten” this time around. Kingfisher, the owner of DIY chains B&Q and Screwfix, has just announced the closure of 60 stores in the UK and Ireland over the next two years. The company has announced plans to ‘organise itself very differently’, cutting the number of products sold as well as unifying its IT platform across the group. The news follows the group’s recent announcement of a fall in pre-tax profits and decision to “duck out” of the planned €275 million purchase of French DIY chain ‘Mr Bricolage’.
B&Q’s announcement is the latest “crack” in the UK DIY market and comes just months after Homebase’s announcement to close 1 in 4 stores as part of a turnaround plan. Home Retail Group, the owner of Homebase and Argos, warned ‘the DIY retailer had to face up to the rise of a generation less skilled in DIY’ and that ‘the country’s love of DIY is fading’.
The DIY sector has become highly competitive, with increasing competition from supermarkets, large high street chains and online retailers with only the strongest being able to survive. As many will recall 2011 saw one of the larger DIY retailers, Focus DIY, collapse and “eggs-it” the market with debts of approximately £230 million. The recent announcements and struggles of B&Q and Homebase only confirm that the DIY sector has been amongst the hardest hit over the past few years, strongly affected by the stagnant housing market, economy and weak consumer confidence- no “yoke” indeed!
In response to this it is evident this Easter that many DIY retailers are desperate to entice customers through their doors with some shops offering up to 70% off many home improvement products. Based on research by Santander last Easter only 1 in 6 UK households engaged in some form of DIY over the long weekend and with the declining trend in DIY it could be even less this year. It will be interesting to see what Easter 2015 holds for the DIY sector and the long term effects on the larger retailers.
So don’t put your feet up and tuck into the Easter eggs just yet, rush out to your local DIY store this bank holiday weekend to “scramble” for some “eggcellent” deals. Let’s see if we can make it 2 million bags of compost this year.
*with apologies for the cheep cheep puns.