Supply chain boost for Kingfisher

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Supply chain initiatives helped DIY group Kingfisher push its retail profits up 23.5 per cent to £277m in the first half of its financial year on sales up 1.4 per cent to £5.1bn.

In the first half at Kingfisher’s B&Q business in the UK one of the four distribution centres closed with a gross margin benefit of 20bps, while 60 double-decker distribution trailers were introduced. Reducing shrinkage gave a gross margin benefit of 30bps while operating costs were down one per cent. Another 60 double-deckers were introduced in the second half and operating costs were cut by one per cent year on year.

In France, it said that its buying optimisation and cost reduction programmes were delivering ahead of plan. Stock shrinkage rates were reduced with a gross margin benefit of 10bps while operating cost savings totalled 37m euros.

A key element of Kingfisher’s plan has been increasing group sourcing and it said it was continuing to increase the volume of direct sourced shipments and extend the number of direct sourced product lines.

Inventory levels have also been reduced in the first half with overall moving annual average stock days running at eight less days year on year, “eg B&Q UK & Ireland running at nine days lower while product availability for customers reached record levels”.

It said the full year working capital target remained a reduction of £50 million.

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