A slowdown in consumer spending has taken its toll on the home improvement company B&Q, which saw a near 2 per cent drop in like-for-like sales in the fourth quarter.
However, a strong performance from Castorama in France and Poland helped offset weaker sales in the UK and China and overall like-for-like sales at the parent company Kingfisher were down 0.5 per cent in the 13 weeks to 2 February.
Kingfisher's chief exec-utive Ian Cheshire said B&Q, which is revamping its 324 stores, had made good progress in a challenging market. "By focusing on improving product choice, store environment and service for customers, B&Q now has a stronger platform to face what is expected to be a tougher consumer environment," he said.
The revamped stores are in a larger format designed to devote more space to showroom displays of complete kitchens and bathrooms, as the chain looks to get away from aisle-based layouts. Initial results have been encouraging, with new decorative, bedroom and flooring ranges performing particularly well.
Mr Cheshire said the company would look at management, better returns and better use of capital, with further details of his strategy to come at annual results in March.
David Jeary, at Investec Securities, said the challenges for Mr Cheshire "remain daunting".
Kingfisher has been under pressure in the UK due to a weakening housing market and a consumer downturn as households struggle with higher bills and mortgage payments. Charles Nichols, an analyst at Landsbanki, said: "The pressure on the housing market from the credit crunch and the lagged impact from rising interest rates casts a cloud over the outlook for 2008-09."
In the rest of Kingfisher's European business, like-for-like sales rose 4.4 per cent in the fourth quarter.
Kingfisher said full-year adjusted pre-tax profit would be in line with market consensus forecasts. Shares in the company added 3.5p to 135.5p.Reuse content