Monday, 25 January 2016

Kingfisher aims for £500m profit boost

Kingfisher's announcement is in some ways an encouraging recognition of a number of disruptors that the business faces in the medium term. Not only is the growth in online sales likely to make greater inroads into the home retail market, but Kingfisher is also likely to see an intensification in competition following the takeover and upcoming re-branding of Homebase by Bunnings.

Enhancing its multichannel offering, especially via click and collect and smaller retail spaces is something that Kingfisher has pioneered well with Screwfix. It will be interesting to see how this translates into other business areas with larger spaces needed to facilitate the showrooming of packages like bathrooms and kitchens to customers.

In terms of price commitments, Kingfisher is operating from a position of strength given low oil prices and the potential to streamline the offline business. Nevertheless, the cost of significant restructuring could be problematic and a rise in oil or commodity prices could undermine the ability to deliver some price cuts.

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