Screwfix sales driven by mobile click, pay & collect service

Home improvement retail group Kingfisher's trade arm Screwfix grew year-on-year sales by 24.2% in the 13 weeks to 3 May, with revenue totalling £192 million for the period.

Sales increased 12% on a like-for-like basis, and in Thursday's Q1 statement the retailer said that much of its success is being driven by its multichannel proposition, which includes a click, pay & collect service that now accounts for 80% of all sales made via a mobile device.

Tradesmen are seemingly identifying the benefits of ordering products on their smartphones and collecting the items en route to their renovation or building jobs. Indeed, the wider Kingfisher group is looking at the multichannel successes achieved at Screwfix and seeing where this best practice can be introduced into its consumer-facing businesses such as B&Q.

Nine net new Screwfix outlets were opened during the first quarter of Kingfisher's financial year, taking the total to 344, while the retailer's online presence continued to grow through social media, where it boasts over 100,000 Facebook fans and 20,000 Twitter followers.

The use of digital media in the form of self-help videos is also rising in popularity, with Screwfix achieving 165,000 views on its YouTube channel in Q1 alone. The company is also close to launching its first store in Germany as it looks to build an international presence.

Greg Bromley, consultant at retail research group Conlumino, said Screwfix is acting as the group's "primary growth driver" in the UK and Ireland.

He added: "Screwfix benefited from its strong promotional programme, and the roll-out of nine new outlets. Its range depth is proving popular, with its exclusive trade brands, such as GoldScrew and Titan, now accounting for nearly one in five sales.

"Elsewhere, Screwfix's multichannel improvements, namely its mobile click, pay & collect offer proved popular, especially with its core trade-led customer base."

With 1.5 million people visiting the Screwfix website every week, Bromley says it is "imperative" that Kingfisher continues its strong investment into its trade operation proposition, especially with rival Wickes now investing in smaller, more focused formats.

During the 13-week period, total group sales at Kingfisher – which operates DIY businesses across Europe – increased by 9.2%, while like-for-like revenue jumped by 6.1%. In the UK & Ireland, B&Q saw like-for-like sales grow 9.7%, with the mild weather over the traditional busy Easter period having a positive impact.

Retail profit increased 35.2% to £68 million in the UK & Ireland, although gross margin declined two percentage points, reflecting higher sales of lower margin outdoor products, promotional activity and growing price competition.

"Overall [it was] a positive set of results to start the financial year for Kingfisher," noted Bromley.

"While Screwfix's offer continues to impress consumers, with especially strong traction amongst tradespersons, the group will be pleased that progress is also being made at B&Q. If B&Q can continue this positive momentum going forward, with continued plans to re-format and reduce space (including subletting space to the grocers), alongside strengthening its multichannel offer, then we are optimistic for the long-term outlook for the DIY specialist."