Global eyes - the DIY channel around the world

By NZ Hardware Journal June 15, 2015 Industry news

A round-up of some of the latest DIY and merchant channel happenings and results from around the world.

MORE ON MASTERS’ RETHOUGHT PLANS

Woolworths released its Q3 FY 2015 figures in May and at the same time gave us the best picture to date of its “where to from here” for Masters.

Masters’ Q3 sales were AU$217m, +21.2% on Q3 FY 2014, while Home Timber & Hardware’s were AU$238m (+22.1% on 2014).

The same day as the financial announcement, Woolworths ran an Investor Strategy Day where it gave out quite a bit more detail about the new plans for Masters than had been publicly available.

Confirming its previously stated outlook that its rationale for entering the AU$45 billion DIY market “remains compelling” and that Masters “will be a long term profit contributor to the Woolworths Group”, Woolies also talked of having learned “a great deal” since Masters launched.

As such, the Masters model has been adapted in respect of ranging, value perception, the evolution of the store format and of the store network itself.

In terms of the nitty gritty, Woolworths admits that Masters’ original store layout had been too project-focused, to the detriment of some staple DIY categories, and that changes have since included making space for the “high visitation/high margin categories”, along with “enhanced flows & adjacencies”.

“Range gaps in critical categories” have also now been plugged thanks to a “structured redesign of key categories’ ranges with [the] addition of new brands”.

Masters’ low customer value perception has also been worked on, because the store’s actual price competitiveness was “insufficiently perceived”. National campaigns like “Australia you’ve been paying too much for paint” and weekly “price jolts” were rolled out to “drive value perception and traffic”.

In terms of lessons learned from the initial store roll-out, Woolworths admits higher than anticipated levels of cannibalisation due to the dense initial store network in Victoria especially. Hence the slowing of the original roll-out plan and greater focus on metropolitan areas, particularly in NSW.

In Q3, two new format stores were opened in New South Wales and Western Australia, bringing the total to 53 so far, and O’Brien said the plan is to now to have 13 stores (“approximately 22% of our network”) refitted to the new format by the end of the financial year and to retrofit half the stores by the end of FY 2016.

 

SCREWFIX UP FOR WHICH? AWARD

UK consumer watchdog Which? has shortlisted Kingfisher Group’s trade arm Screwfix among the top dogs in the Best Retailer category. Screwfix sits alongside four other UK retail high fliers: John Lewis; Lush; Richer Sounds; and Wex Photographic. The Awards encompass the best car manufacturers and supermarkets, banks and broadband providers and are to be revealed in June.

 

KINGFISHER’S CHINA EXIT CONFIRMED

On 22 December 2014 Kingfisher announced a binding agreement to sell a controlling 70% stake in its B&Q China business to Wumei Holdings Group for £140 million. This agreement followed Kingfisher’s previous announcement of its plans to look for a strategic partner to help develop its B&Q business in China. The transaction has since been approved by MOFCOM (Chinese Ministry of Commerce).

 

WAS WICKES FIRST UP BEST DRESSED?

Verdict Retail in the UK recently made an interesting point around Wickes bucking the trend for store closures, in contrast to the ongoing “frantic” right sizing of the B&Q and Homebase networks.

Wickes recently reiterated it would open 5-10 stores a year, Verdict making the point that because it was among the first to arrive at a manageable portfolio of stores back on 2011, it has been among the first to reinvest in its bricks & mortar footprint.

Still, by 2017, Verdict forecasts, B&Q, Homebase and Wickes’ combined floor area will still have shrunk by 18% compared to 2013 levels, which equates to a reduction of around 8.5 million square feet…

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