Kingfisher sales hit by weak UK

Kingfisher, Europe's biggest home improvement retailer, posted a small fall in underlying second-quarter sales as a hit to its British business from the closing down sale of a rival outweighed solid growth in France.

The group, which runs market leader B&Q in Britain as well as the Castorama and Brico Depot chains in France and elsewhere, said on Thursday sales at stores open over a year fell 0.5 per cent in the 11 weeks to 16 July.

That was down from a 3.3 percent rise in the first quarter, although Kingfisher said at that time a warm spring and an extra public holiday in Britain had pulled demand forward.

Underlying sales at B&Q plunged 6.7 per cent, hit by the clearance sale at collapsed rival Focus DIY.

Analysts expected a four per cent decline and think Kingfisher should benefit from the demise of Focus DIY in the longer term, not least because it has bought around 30 of its stores.

Kingfisher, which makes 40 about per cent of its sales in each of Britain and France, said underlying sales rose 3.7 per cent in France and were up 1.4 per cent elsewhere, with gains in Poland, Russia and Spain offsetting a fall in China.

Retailers in Britain, particularly those selling discretionary goods, are having a tough time as household budgets are squeezed by higher prices, subdued wages growth and government austerity measures.