Mulcahy shifts blame for `rip-off Britain'
Wednesday 15 September 1999
Sir Geoff Mulcahy, Kingfisher's chief executive, said manufacturers were also responsible as they charge higher prices for goods in Europe than in the US. They also charge higher prices in some European countries than others, he said.
Sir Geoff added that Government policies were a further problem as UK retailers have to contend with restrictive planning and environmental policies as well as higher taxes and labour costs. "We are in favour of bringing prices down. But it is not something that is solely within our gift. We need to work with manufacturers and the Government to enable that to happen.
"I am not criticising Government policy. I am simply making the point that planning applications are more difficult here than in the US and our cost structures are higher. These reflect themselves in prices."
Sir Geoff said he did not advocate a "name and shame" approach to the problem. "We would prefer to work together to find a solution."
Kingfisher is rolling out its own brand of electrical goods, called Proline, in an attempt to lower prices in its stores.
Sir Geoff was speaking as Kingfisher announced a 10 per cent rise in half-year profits to pounds 249.7m. The figures included pounds 4m of costs associated with Kingfisher's bid for Asda, which was trumped by the pounds 6.7bn offer from Wal-Mart.
However, Sir Geoff denied that losing out on Asda placed the company in a strategic bind. "The Asda portfolio was unique because of the size of its stores. But speculation about us getting into food retailing for its own sake is missing the point. We are quite confident that the general merchandise formats [like Woolworths] can compete."
He said a deal in Europe was more likely than in the UK and that Kingfisher need not necessarily acquire a food retailer in order to offer food ranges in its stores. "There are other ways to skin a cat," he said.
Kingfisher's like-for-like sales grew by 4.3 per cent on last year, with the DIY sector the best performer. The shares closed 30.5p lower at 709p.
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