Predictably, most coverage of last week's quarterly trading statement from Kingfisher has been from the investor's point of view. But even if you're not a Kingfisher shareholder, the statement is worth studying, simply because the performance of the UK DIY market leader must be an indicator of the performance of the UK DIY market as a whole.
The significant figure is B&Q's UK like-for-like sales - unaffected by trading in China, Poland or anywhere else, nor by trading results at Screwfix, nor by store openings or closures. And the figure for the quarter to October 30 is: sales down 5.1%.
So on the face of it, that's a pretty gloomy indicator: if the market leader is down more than 5%, the market as a whole must be in a pretty dire state, mustn't it? But look a little more closely. That's a year-on-year figure - ie comparing sales in that quarter with sales in the same quarter 12 months earlier. And in the quarter to October 31 2009, B&Q's UK like-for-like sales were up 5.7%, the result of aggressive stock clearance activity. In other words the 5.1% decline in sales in the latest quarter is measured against an artificially high previous benchmark.
So it's not such a gloomy indicator after all - in fact it suggests that when the unusual upturn of 2009/Q3 is factored out, B&Q's underlying UK sales are pretty steady. And in the face of a dire property market, constant negative media coverage and the prospect of rising unemployment, that's far from gloomy. In fact it's actually quite encouraging. Take heart!
6 December 2010 | 12:15 |