B&Q sublets half a London store to Asda

DIY giant B&Q is set to launch a series of multichannel initiatives next year including kiosks and an overhauled website as it sublets its first store to Asda as part of its plan to reduce space as multichannel sales grow.

B&Q has split its 120,000 sq ft store in Belvedere, south London and sublet 60,000 sq ft of space to Asda, which is understood to be opening one of its smaller format Supermarket stores there.

It is the first time B&Q has carved up a store as it reassesses its large portfolio in the multichannel era. The B&Q store will relaunch on October 26. Asda’s opening date is to be confirmed.

At an analyst trip to B&Q sister business Screwfix’s Stoke head office on Friday, B&Q chief executive Martyn Phillips admitted that carving up stores is a “notoriously difficult to do” but added: “We’re seeing how much money we can take with less space. It’s about [reducing] densities, not taking categories out.”

Last month group chief executive of B&Q owner Kingfisher Ian Cheshire revealed that a property review is underway at the UK’s largest home improvement retailer in light of growing online sales.

The retailer also last week shed 220 staff – as well as created 100 new positions – to ensure it has a more “customer centric” head office that can execute the omnichannel strategy. “There was clearly a cost saving element but we also need to gear the business up to be a beyond-store organisation,” said Phillips.

B&Q is also revamping its website under new customer director Steve Robinson, the former boss of both M&M Direct and Tesco.com who was hired this year.

The retailer aims for online sales to account for 10% of overall sales in the next 3-5 years. Currently, said Phillips, web sales account for “virtually next to nothing”.

Robinson is overseeing an expansion of SKUs offered online from 10,000 to “north of 20,000” next year.

“We are step changing the range in the next 12 months,” said Robinson.

Next year B&Q will trial kiosks and tablets in store as part of the omnichannel strategy. In January it will unveil an App for its recently launched B&Q Club – an email-based promotions initiative launched in recent weeks that offers customers relevant deals.

Sister chain Screwfix, a trade business based on a strong multichannel model, is sharing best practice with B&Q via a three-year initiative called Project Darwin - which is already half way through - and Kingfisher is investing about £60-£65m in a new web platform, which is being designed so that it can eventually be used across the group.

B&Q has in recent weeks begun using the Screwfix distribution facility to fulfil its next day delivery orders.

“DIY.com in Q3 will look and feel a bit different,” said Robinson. “We’ll be piggybacking on Screwfix’s facility.”

Phillips said store expansion is not a priority for B&Q, adding that while there are “15-20 stores we’d like to be in, we want to get the space we’ve got now working better”.

Source : Nicola Harrison - Retail Week
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