The home improvement retailer Travis Perkins announced that sales had dropped 20% in the first 6 months of its financial year. The company attributed the poor performance to the COVID-19 pandemic and resulting lockdown. Like-for-like sales in June were down 7%, this was an improvement on the preceding months’ figures which were down 64% April and 35% in May. The retailer said that its builders’ merchants business was particularly badly hit with other sectors performing well with a boost in DIY behaviour.
The company said that trading has been recovering but that there were still strong “near-term headwinds” facing the business. In June Travis Perkins announced plans to permanently close 165 branches with the loss of around 2,500 jobs as part of a drive to cut costs. The retailer said that these actions meant it was well placed to continue to service customers and generate value for shareholders.
“These results reflect the nature of COVID-19 disruption in the UK DIY Market. As outlined in DIY Retailing: Inc Impact of COVID-19 – UK, May 2020, the impact of this uncertainty will be polarised between the lighter and heavier ends of the market. In the former, although spending fragmented to non-specialists during April and May amid store closures and the redirection of demand online, these sales largely returned in June amid the rush to reopened DIY stores; buoyed by the boosted demand for home improvement projects given extended periods inside.
However, in the latter, this impact among heavier-end specialists will be exacerbated by ongoing financial constraints, uncertainty in the housing market and the reluctance to allow tradesmen into the home amid ongoing caution to exposure. Moving into 2021 and beyond, this heavier demand will gradually return; however, this extended period of self-reliance might boost confidence in DIY ability, thereby potentially reversing the rising trend of ‘do-it-for-me’ seen over the past decade, which could see building merchant’s sales fall.”