SHARE OF THE WEEK: B&Q owner Kingfisher will be latest retailer to shine light on extent to which consumers are cutting back as inflation spirals
B&Q owner Kingfisher will be the latest retailer to shine a light on the extent to which consumers are cutting back as inflation spirals.
The DIY group, which also owns Screwfix, soared as lockdowns fuelled a home improvement boom. It stunned the City in March as it became the UK’s third retailer, after Tesco and Marks and Spencer, to record an annual profit over £1billion.
But as the cost of living rises analysts will seek evidence of a drop in spending in the half-year results on Thursday.
They will also ponder whether the boom has run out of steam after rival Wickes warned demand had ‘softened’.
Hargreaves Lansdown analyst Susannah Streeter said: ‘There are tentative signs the number of amateur builders, painters and carpenters hanging up their tool kits is growing. Many DIY projects aimed at carving out working environments at home are also likely to have been completed, as more employees settle into a hybrid rhythm of work.’
She said home owners may be put off projects because of the bleak economic outlook.
The DIY slowdown and market turmoil has seen Kingfisher shares fall more than a quarter this year to levels seen in summer 2020, around 250p.
But Deutsche Bank analysts disagree DIY will be ‘one of the biggest casualties’ of a recession. Improvements will be hit by higher mortgages and bills but working from home and outdated houses needing energy efficiency upgrades mean there are more ‘tailwinds’ than other markets.