Commenting ahead of Home Retail Group first quarter sale results to be released tomorrow (Thursday 13th June 2013), Mintel’s Director of Retail research Richard Perks said: “First quarter sales from Home Retail will show Argos performing well, thanks to the demise of Comet, but Homebase performing badly.” THE WEATHER “Gardening and seasonal products make up around 25% of sales at Homebase – versus an estimated 20% at rival B&Q. So we expect Homebase to have been hit by the poor spring weather in Q1 this year. Homebase’s Q1 covers the period March to May, and this coincides with the usual spring peak in DIY and garden sales. As usual there are conflicting factors. The exceptionally cold spring hurt sales, but then there was near perfect weather for the Mayday bank holiday. And at the end of the month there was the spring bank holiday which had been pushed forward into June last year for the Jubilee. This relatively strong homewares category should be helping to bolster sales at Homebase, given its soft-furnishings offer. But we doubt this will be enough to prevent a disappointing performance. We think that Homebase has broader issues relating to customer satisfaction. Mintel’s consumer research for our recent report, DIY Retailing – UK, May 2013, found Homebase typically scored below its peers on customer satisfaction ratings.” SATISFACTION “For our report, DIY Retailing – UK, May 2013, Mintel asked consumers how they rated the DIY stores they used most often. The general level of satisfaction with DIY retailers is very high. But Homebase is trails its major rivals, with shortcomings relative to its peers in almost every category. While overall dissatisfaction levels remain low at Homebase, they are higher than at any of its major competitors. One way to look at the data is to calculate a weighted average for each retailer. We have done this on the basis of +2 for very satisfied through to 0 for neutral to -2 for very dissatisfied.” “We then drilled down to get a feel for satisfaction by various key criteria. Again, dissatisfaction ratings are low, but they still affect the overall rating and while Homebase only has a small number of unhappy customers, it is a larger minority than for any of the others. Homebase scores well below B&Q on measures including knowledgeable staff and good range of products. It ranks below B&Q also on good after-sales service and stock availability.” In Summary: Given these findings, we think Homebase could be losing sales not simply because of the weather or the macro-economic conditions – but because of weaknesses in its in-store offer. Mintel’s satisfaction data suggests that Homebase needs to work on improving its service and product levels. In a weak DIY market and a weather-hit garden market, retailers such as Homebase cannot afford to overlook the basics of good shopkeeping. You might also be interested in: No related posts.