Group priorities

• Managing the impact of COVID-19
• Build the new Group Executive team
• Rebalancing local vs Group responsibilities
• Pause or stop some initiatives
• Operational improvements in France
• Enabling e-commerce from stores
• Implement our new trading approach
• Accelerate cost reduction

We believe that striking the right balance between Group and local responsibilities sets the right conditions for our distinct retail banners to thrive. This will enable them to continue leveraging the Group’s scale and expertise to meet customer needs that are similar across markets, whilst allowing them to focus on those needs that are different.

We are committed to delivering growth in e-commerce sales through a combination of:

• Shifting to store-based picking and fulfilment as a priority, redesigning the store operating model accordingly to enable a more efficient delivery and click & collect network, with specific categories delivered from fulfilment centres (FCs)
• Developing efficient last-mile delivery from stores, enabling faster fulfilment capability
• Prioritising rollout of the Group’s digital technology stack, enabling more efficient and agile digital capabilities, supported by a more balanced local-Group operating model for IT
• Exploring use of e-commerce marketplaces, with common technology and vendor management, but tailored customer propositions by retail banner

We intend to make it easier for customers to shop with us by building a mobile-first, data-led and service orientated customer experience. We also aim to provide customers with a more compelling and complete services offer, including in-store services (e.g. paint mixing, timber cutting), visualisation tools, installation services and consumer credit.

Kingfisher Group’s Offer & Sourcing organisation continues to develop own exclusive brands (OEB), bringing innovation to customers across seven core categories – surfaces & décor, tools & hardware, bathroom & storage, kitchen, EPHC (electricals, plumbing, heating & cooling), building & joinery, outdoor. OEB provides a strong point of differentiation for our retail banners in terms of design, functionality and value for money, as well as providing us with a higher gross margin opportunity. We aim to grow our proportion of sales which are OEB, bringing innovation to our ranges.

We firmly believe that the role of the store is integral to long-term success in retail. Our 1,350+ stores are key to delivering a seamless customer experience, whether goods are purchased in-store or via click & collect (C&C) or home delivery. The coronavirus crisis has highlighted the importance of e-commerce and we believe our stores have an integral role to play in meeting the increasing customer need for convenience and immediacy.

Through the intelligent use of our scale we expect to extract further value from buying and sourcing. We also believe that there are significant cost reduction opportunities across Kingfisher – in areas such as goods not for resale (GNFR*), store operating efficiencies, property costs (including lease renegotiations), supply and logistics, and central costs*, all of which will benefit from reduced organisational complexity. Reducing inventory levels and improving inventory turn is also a major priority.

Our commitment to doing everything we can to make a positive impact on society so that our customers’ homes and wider communities can flourish has been at the forefront of our response throughout the coronavirus crisis (for more details see Section 2). In our new ‘Powered by Kingfisher’ strategy, we set out four priority areas for responsible business where Kingfisher can use its experience, scale and influence to achieve the most positive impact.