Home Depot to take on Britain

HOME Depot, the US company whose do-it-yourself warehouses were used as a model for B&Q's new warehouse format, is tomorrow expected to announce that it is coming to Britain.

Home Depot would not comment but it is believed that it will set up a European operation, with Jim Hodkinson - who ran the B&Q chain for Kingfisher until two years ago - as a consultant. He worked with the founders, David Quayle and Richard Block. A two- year contract to investigate international opportunities for Kingfisher expires at the end of the month.

Home Depot was created in 1978 to rival conventional DIY superstores by offering a broader product range at lower prices. It now has 283 stores, with an average size of 100,000 square feet, in 24 US states, with sales of dollars 9.2bn, and has sparked a number of emulators.

B&Q has been experimenting with importing the Depot format to Britain since 1990, when it opened a 40,000 sq ft store, called Warehouse, in Chelmsford, Essex, with a wider range and a more basic format. Since then, however, it has decided that it needs larger sites and has renamed the chain Depot. It already has 14 stores that meet this criterion, another is expected to open later this year and it is believed that it is planning to open a further 10 annually.

The prospect of increased competition for B&Q is likely to unsettle Kingfisher's shares as there is already speculation that the returns from the chain are too low to justify the cost of the stores and their low margins.

Nigel Whittaker, corporate affairs director of Kingfisher, said yesterday: 'I can confirm that we believe the new wave of DIY retailing is to concentrate on wider ranges, at cheaper prices with better service and larger stores.'