Kingfisher pushes ahead with integrated supply chain

Kingfisher highlighted progress on its strategy to deliver one offer and supply chain organisation, when it unveiled its results for 2016.

The retailer, whose brands include Screwfix and B&Q in the UK, is moving away from an organisation structure with nine buying and logistics teams, in nine operating companies which source and merchandise their own ranges independently.

“Instead, we are reorganising as ONE organisation, starting with our offer, with planning underway to develop an integrated supply chain network.”

It said that new unified global functions and roles started from June, mostly as a result of internal moves, leading to lower transformation exceptional costs than originally anticipated for this year.

“New range teams, located across the UK and France are working closely with operating companies, who retain responsibility for activities such as trading, range implementation, local pricing and customer needs.”

The group expects its overall transformation plan to deliver a £500 million sustainable profit uplift by the end of year five.

The business is optimising operation efficiency. It said the main driver for this would come from unifying some 90 per cent of the £1.2bn annual spend on goods not for resale. This programme is a combination of cost savings, and an opportunity to work in a simpler and more effective way across the business.

At the same time it has been closing some 65 B&Q stores representing some 15 per cent of total surplus space.

The group increased sales by 8.7 per cent to £11.2 billion for the year to 31st January, while underlying pre-tax profit was up 14.7 per cent to £787 million.

Chief executive Véronique Laury said: “I am really pleased that our performance has been achieved alongside delivering the key first year strategic milestones of our ambitious five year transformation plan, based on creating a unified company where customer needs come first. We have learned a lot and are aware of the challenges. We are well set up for next year and beyond as the level of activity increases.”