News

Kingfisher accelerates use of store assets for delivery solutions

Kingfisher has accelerated its use of store assets for faster click and collect and last-mile delivery, the company said in its latest results this week.

Its initiatives include launching one-hour delivery with Screwfix Sprint which launched in August 2021, offering delivery direct to home or site within one hour. ‘Sprint’ currently covers over one third of UK postcodes, with further rollout planned in FY 22/23.

Average delivery time is around 45 minutes, the company said, although its quickest delivery has been eight minutes. Kingfisher said it was sharing lessons from the roll-out with its other retail banners that are testing same-day delivery, including B&Q.

Click and collect remains the group’s most popular online fulfilment channel. It was down 2.4% YoY but grew by 217% on a 2-year basis. The company said this was a strong performance considering the sharp rise in e-commerce sales following the onset of the pandemic in 2020.

To date click and collect accounts for 87% of group ecommerce orders (FY 20/21: 90%) and 73% of group ecommerce sales (FY 20/21: 78%), the company said.

Kingfisher has begun the rollout of click and collect lockers to Castorama Poland stores in FY 21/22 and began testing click and collect lockers at some B&Q stores. It has also built car park collection capabilities in France, as well as contactless ‘Drive-thru’ collections in both France and Poland, for all its medium and large stores.

Its focus on expansion of compact store formats, which allow the group to expand into city centres, is also broadening click and collect options.

Kingfisher is heavily focused on a store-based picking and fulfilment model which has been critical to efficiently meeting significant online volumes, it said.

In its full year 21/22, 91% of the Group’s e-commerce orders were picked in store (excluding Screwfix: 89%). Currently 54 B&Q stores are being used as ‘digital hubs’ for fulfilling home deliveries, serving nearly 100% of UK postcodes. The company is also reorganising its distribution and fulfilment capacity in the UK, with one new site opened at Screwfix in December 2021, and two new B&Q sites opening in FY 22/23.

The company said that to date the company had been able to manage its supply and logistics needs ‘effectively’, thanks to the strength and expertise of its supply, sourcing and logistics teams. It said the business has worked closely with suppliers and logistics providers, improved forecasting, and placed orders significantly ahead of peak trading periods and important global events, such as the Chinese New Year. It said it has also carefully managed shipping container costs and availability, although it admits this remains a constant challenge, as well as the shortage of heavy goods vehicles (HGV) drivers.

However Kingfisher said key product availability risks have been driven by polarised demand within some categories, such as building materials and outdoor ranges, where suppliers have struggled to keep up with high order levels, while managing extended lead times for their raw materials.

Kingfisher said it has focused with suppliers on protecting its ‘best seller’ ranges which is now seeing improved availability during FY 21/22 and that while overall product availability is still below ‘normal’, the group has built up inventory levels in all key categories ahead of peak trading periods in H1 22/23.