Kingfisher / B&Q feeling the pinch?...

Was in the Bletchley B&Q 2 days ago looking specifically for 75mm guttering in a length longer than 2m. It's for a conservatory, and I want one length so that there are no (leaking) joints in the future. I'll now go elsewhere, and B&Q will be the loser. Couldn't find some other items either e.g. rotating laser level, nor petrol strimmers with a proper brushwood capability.

Prices seemed OK on what they did have, matching or bettering web based prices on the few I checked out.

Go to New City Heating:

The march of Screwfix from strength to strength must be a lot of consolation - and also partly to blame!

The blame is on the sheds that turn out not to have what you want. I went to B&Q on Tuesday with a list of items that should have left me 50GBP lighter - and ended up paying just 2.38GBP. They won't make a profit if they don't have the goods.

BTW how much of that 50 GBP was in the s/fix catalogue?

want. I went to

they don't have

Which is also probably another reason why B&Q stores are feeling the pinch, IOW, the left hand not knowing that it's cutting off the right hand....

Most.

The equation is pretty simple.

The retail stores are more expensive than the industrial warehouse per square metre.

Therefore, it makes sense to offload excess retail space by disposing of properties or subletting to other retailers who will pay the higher rents.

The gamble is the extent to which retail customers will switch to buying from B&Q on line or Screwfix, but for the most part these are lower margin lines.

Increasingly retail space only makes sense for higher margin items, so this is a sensible strategy.

Keep in mind that Kingfisher is the world's third largest DIY retailer after the American Home Depot and Lowes by quite some margin, so they can afford to lose some market share provided that the financial situation can be matched to market conditions.

Since Homebase have stores selling all sorts of crap and Focus sell pet stuff and even used to sell bunny rabbits, it's not unreasonable for Kingfisher's B&Q operation to diversify. The interesting thing will be whether they do it more effectively than the others.

Far be for me to suggest how Kingfisher(B&Q) might rent out their excess space ... but I've oft wondered about (say) Dulux etc. Now, I don't know about you ... but I don't suddenly think 'why don't I paint that wall ... ???? !': No; painting is part of a 'It's about time we 'did' that room' strategy. We trog off down to (say) B&Q and purchase (say) Ten pounds of paint - but B&Q need to have thousands of pounds worth of inventory, just so I'll be able to choose the paint I happen to want - off which Gordon Brown will get over a quid - and perhaps B&Q make a quid on the deal. It might make more sense for B&Q to say to Dulux ... you may rent space in our store for £xxx - you supply the inventory; you take the gamble on having the stuff in stock when this punter decides to paint the walls.

disposing

higher

Yes, but there lies the problems, what about the not so few who either have no access to such online stores [1], yes many people will use the online shop if their local store does close or doesn't stock what they want but there will be many who will not - I would just either drive the 12 mile round trip to by local Homebase shed or use the long established builders merchants (who deliver free BTW).

retailer

But companies still need to stock what people want, not what they just *think* can make a quick profit (which seems to be the way that B&Q are trading ATM), I / suspect / many people are buying from my local B&Q because it's the only local 'DIY store', the only other option now are the 'trade' outlets or a 12 mile round trip to indifferent DIY sheds.

unreasonable

thing

Or just end up in decline, like many of the DIY sheds, my 'local' Focus seems half empty all the time, half the floor space in my 'local' Homebase is given over to home furnishings or leisure products - nice 8k GBP Hot Tub on display...

don't

about

It would probably be cheaper to give Dulux the floor space, and then be paid a proportion of the sales profit, as it is I suspect that they work on some sort of 'sale or return' anyway - traders will not be happy if they buy thousands of pounds of paint from Dulux (and their new year colour scheme) only to find that Dulux have made a bum choice as to what was going to be in fashion that year. IYSWIM?

It is common in the retail sector for manufacturers to help with the merchandising of their products, using financial means as well as having people go along to help organise displays and train staff.

Regarding paint, of course this is why there is a trend towards paints mixed at time of sale. It gives the customer more choice, the inventory is less and you can charge more.

I would suspect that there is a fairly high correlation between people without internet access and lack of ability to spend money anyway.

People who have internet access but won't give CC details over secure electronic transaction services to reputable traders have their own agenda and I don't see a reason to accomodate them.

The retailers aren't charities.

Mail order has existed for decades, and on-line business is really only the latest variant of that.

Stock profiles are controlled by a number of factors. Certainly it isn't a winning proposition to stock vast ranges of low margin/cost items in competition with other local stores. If people will buy the quick profit, high margin items and not having the low margin ones doesn't discourage people from visiting, then a store will reasonably do that.

I am sure that your analysis is right. My nearest DIY store is a Focus. I tend to avoid it because choice is limited and the staff are rude and surly. I will tend to use it for a known commodity item like a paintbrush that I want quickly, but that's about it.

If I can plan a project a reasonable time ahead, I'll order the materials from Screwfix or similar. If it's not possible to do that, then I will tend to use B&Q, even though it's further to go simply because it is large enough to be more likely to have all I want. I don't want to spend time going from store to store.

So for me, if B&Q destock things that I want to buy beyond a certain point and I have to go elsewhere too much, then I wouldn't go there to consider the things at higher margin and value that they may like to sell me.

I agree. That's entirely possible. It depends on how smart they are. Homebase and Focus have loyalty programs to at least try to profile customer purchases, but I am not convinced that they have used them properly.

stock

over

people

Rubbish, my brother is not short of money but has no internet access at home, out of choice...!

secure

Yes quite true, but they do need to do what the customer wants to some degree, loose your customer base and you're a 'has been'...

You really seem to think that 99.99999EEEE of the population have internet connections *at home*, that is simply not true, many people still *don't* have either the means to access web sites or can't / won't use online transactions.

items,

It's not if you're not then attracting the customer to enter the store in the first place!

reasonably

But that is the point, many of the quick profit, high margin items are of the impulse purchase type, people having gone into the store to buy some other low margin/cost item that they know will be in stock, remove those low margin/cost items and you risk loosing the 'passing trade' that buys those quick profit, high margin items... People don't tend to go to DIY sheds just to see what's in stock / browse around.

I suspect that many people, especially those who have limited time to spare, just go directly to were they know what they want will be in stock (or can be ordered with ease),be that a local shed, trade merchant or online store.

I don't think that you can 'profile' DIY purchases in the same way as you can food sales etc., to much will be of the distress purchase type whilst other sales will be of the 'once-a-lifetime' type or yearly purchases, I suspect that the retailers know that and are linking into loyalty schemes purely as a way of enticing customers into the store.

The only reasons that B&Q have got my money recently is because of:

sheet materials that I cannot reasonably get elsewhere; being able to have 'hands-on' items before purchase; wide range of lighting.

Of course I have purchased other items whilst there but there are better ranges of some of B&Q's 'natural range' that I can buy from Screwfix or Argos. B&Q have some good ideas but don't seem to be able to implement them properly. Our larger local store (we have a choice of three) has room set aside for demonstrations yet I have never been in store whilst a demonstration is going on.

Quite a number of good points!!

B & Q have lost the plot. An example is that the local store (together with Focus and Homebase) have gone over to 0870 numbers. I therefore don't bother to phone them to check stock availability or for other information, I use one of their usually cheaper local competitors. Toolstation is now cheaper than Screwfix, with equivalent or better delivery albeit with a more limited product range. I also buy quite a lot from CPC, whose delivery is frequently unbelievably fast, particularly when I do not want to be dragged out of bed, clutching a cup of coffee, at 8.00am!!

I can only agree on Focus and Homebase, one has no idea of what it wants to sell, the other is rapidly approaching MFI. I made the mistake of buying a spare cheap and cheerful wheelbarrow from Homebase last week( I only buy cheap ones, because once they are covered in cement and concrete, after the task in hand, it is then economic to throw them on the tip!!) The product is a design failure, the strap which stops the legs from spreading hits your feet when the barrow is loaded, and the frame has not been extended around the wheel at the front, making it difficult to tip over forwards. No one had ever tried to use the product, or they wouldn't be selling it! However, when it is thrown on the tip, it will not be a great financial loss. It does however demonstrate the problem of diy shops selling products which are not fit for purpose, because they are out of contact with their customer base. Interestingly enough, Wickes could not supply a wheelbarrow as they had sold out, and all other shops were selling the same product as Wickes at a higher price. Screwfix IIRC could not supply!

Regards Capitol

I did say "high correlation" not that it was universally true.

If you look at data from the National Statistics Office, Dataset HIA3, (Household Internet Access by gross income deciles), it is quite clear.

The question is which customers are the ones wanted.

I didn't say that at all. See figures above. In May of this year,

Of course.

That depends on the lines. The seasonal items and kitchens and bathrooms seem to be frequented by people meandering around.

Of course.

Although the payouts are not really any higher than for food.

Meanwhile Screwfix are now starting up a chain of trade counters ... just a pity that the nearest is a little too far for convenience.

thrown on

It's not being out of touch with their customer base, after all they are still stocking the product, what they are out of touch with is the product - as you say if anyone had bothered to inspect the product they would not be selling it, all someone has seen is that the computerised stock control says that they need to restock wheelbarrows and have then gone and bought on price / profit margin without though if the product does what it should.