SHARE OF THE WEEK: B&Q owner Kingfisher set for half-year results
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PART OF THE WEEK: B&Q owner Kingfisher will be latest retailer to shed light on consumer austerity as inflation rises
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B&Q owner Kingfisher will be the latest retailer to shed light on the extent to which consumers are cutting back while inflation rises.
The DIY group, which also owns Screwfix, skyrocketed when lockdowns sparked a home improvement boom. It stunned the city in March when, after Tesco and Marks and Spencer, it became the third UK retailer to make an annual profit of more than £1 billion.
But as the cost of living rises, analysts will search Thursday’s half-year results for evidence of a decline in spending.
They’ll also wonder if the boom picked up steam after rival Wickes warned that demand was ‘weakening’.
Hargreaves Lansdown analyst Susannah Streeter said: “There are tentative signs that the number of amateur builders, painters and carpenters putting up their toolboxes is on the rise. Many DIY projects aimed at creating work environments at home are also likely to be completed as more employees settle into a hybrid work rhythm.”
She said homeowners may delay projects due to the bleak economic outlook.
The slowdown in DIY stores and market turmoil has seen Kingfisher shares fall by more than a quarter this year to summer 2020 levels of around 250 pence.
But analysts at Deutsche Bank disagree that DIY will be “one of the biggest victims” of a recession. Improvements will be hit by higher mortgages and bills, but working from home and aging homes in need of energy efficiency upgrades mean more tailwinds than other markets.