Kingfisher's results are looking sunnier

But they need to tackle their weakness: DIY.

Kingfisher has revealed that total sales across its UK & Ireland fascias – B&Q and Screwfix – increased +3.6 per cent during the 10 weeks to 13 July 2013, with LFLs growing +2.5 per cent.

This update is certainly a sunnier one for Kingfisher. One of the hottest UK summers for many years has brought with it a surge of spending on gardening and outdoor products.  This more positive update comes off the back of a torrid Q1, where notably miserable conditions across the retailer’s key European locations negatively impacted growth during the traditionally critical Easter period. Moreover, while weakness in its core DIY categories continues to represent a cloud on the horizon, Kingfisher is being proactive in its response.

In the UK, this period saw B&Q benefit strongly from the more positive weather, with higher demand for gardening products and outdoor furniture. For example, B&Q saw sales of wooden outdoor furniture grow 56 per cent, while natural stone tiles were 6 per cent ahead. A more austere British consumer is increasingly looking to make the most of their gardens, with BBQs and dinner parties being viewed as attractive alternatives to going out to bars and restaurants. Indeed, while the performance of outdoor categories will inevitably continue to be heavily shaped by seasonal fluctuations, the more frugal post-recessionary consumer mindset means that these categories will present significant opportunities.

Kingfisher is being proactive in its response to weakness across its core DIY categories, which continue to struggle amid weakness in the housing market and generally low consumer interest. To this end, B&Q is gaining market share off the back of investment in stores, a focus on value and the continued development of ranges and services. Moreover, a recent deal with Morrisons to share space in Meir Park, Staffordshire, reflects an understanding of the long term necessity to reduce space in response to structural changes and overcapacity in the UK DIY category. Elsewhere, Kingfisher’s UK trade fascia, Screwfix has achieved a strong Q2 performance, boosted by new outlets and competitive pricing. 

Kingfisher faces a number of challenges to overcome in the medium-long term. Most notably, until the housing market improves significantly, consumer interest in DIY will remain weak.  Linked to this, while the ultimate potential of the Coalition’s Help To Buy scheme remains uncertain, the early signs have been promising. Indeed, we do believe the DIY market will eventually reach a stable and settled level towards the back end of next year. In relation to Kingfisher itself, we retain our view that while it is a victim of circumstance the company is both well run and proactive. Investments in stores, a focus on value and the continued development of ranges and services put it in a strong position to grab share and take advantage of the upturn, when eventually materialises.

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 Managing Director of Conlumino

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Labour's purge: how it works, and what it means

The total number of people removed will be small - but the rancour will linger. 

Labour has just kicked off its first big wave of expulsions, purging many voters from the party’s leadership rolls. Twitter is ablaze with activists who believe they have been kicked out because they are supporters of Jeremy Corbyn. There are, I'm told, more expulsions to come - what's going on?  Is Labour purging its rolls of Corbyn supporters?

The short answer is “No”.

If that opener feels familiar, it should: I wrote it last year, when the last set of purges kicked off, and may end up using it again next year. Labour has stringent rules about expressing support for other candidates and membership of other parties, which account for the bulk of the expulsions. It also has a code of conduct on abusive language which is also thinning the rolls, with supporters of both candidates being kicked off. 

Although the party is in significantly better financial shape than last year, it still is running a skeleton staff and is recovering from an expensive contest (in this case, to keep Britain in the European Union). The compliance unit itself remains small, so once again people from across the party staff have been dragooned in.

The process this year is pretty much the same: Labour party headquarters doesn’t have any bespoke software to match its voters against a long list of candidates in local elections, compiled last year and added to the list of candidates that stood against Labour in the 2016 local and devolved elections, plus a large backlog of complaints from activists.

It’s that backlog that is behind many of the highest-profile and most controversial examples. Last year, in one complaint that was not upheld, a local member was reported to the Compliance Unit for their failure to attend their local party’s annual barbecue. The mood in Labour, in the country and at Westminster, is significantly more bitter this summer than last and the complaints more personal. Ronnie Draper, Ronnie Draper, the general secretary of the Bfawu, the bakers’ union, one of Corbyn’s biggest supporters in the trade union movement, has been expelled, reported for tweets which included the use of the word “traitors” to refer to Labour opponents of Corbyn.  Jon Will Chambers, former bag carrier to Stella Creasy, and a vocal Corbyn critic on Twitter, has been kicked out for using a “Theresa May” twibbon to indicate his preference for May over Andrea Leadsom, in contravention of the party’s rules.

Both activities breach the letter of the party’s rules although you can (and people will) make good arguments against empowering other people to comb through the social media profiles of their opponents for reasons to dob them in.  (In both cases, I wouldn’t be shocked if both complaints were struck down on appeal)

I would be frankly astonished if Corbyn’s margin of victory – or defeat, as unlikely as that remains in my view – isn’t significantly bigger than the number of people who are barred from voting, which will include supporters of both candidates, as well as a number of duplicates (some people who paid £25 were in fact members before the freeze date, others are affliated trade unionists, and so on). 

What is unarguably more significant, as one party staffer reflected is, “the complaints are nastier now [than last year]”. More and more of the messages to compliance are firmly in what you might call “the barbecue category” – they are obviously groundless and based on personal animosity. That doesn’t feel like the basis of a party that is ready to unite at any level. Publicly and privately, most people are still talking down the chances of a split. It may prove impossible to avoid.

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.