Brits avoid big-ticket home renovations over budget fears

Britons avoided big-ticket purchases for their homes and vehicles in the third quarter as pre-Budget uncertainty added to the pressure on their finances, according to retailers.

Consumer confidence weakened during September as Brits poured more cash into their savings amid fears of an imminent tax raid in the Budget.

But retail sales still rose more than expected during the month, driven by an increase in non-food volumes and helped by lower inflation and solid wage growth, highlighting the uncertain environment facing businesses. important.

DIY group Wickes told investors on Tuesday that its design and installation business had seen a sales contraction of 14.1 per cent year-on-year to £245.9m to September 28, dragging down the group’s revenue. 1.6 percent to £1.19 billion.

The group said a 7.2 percent decline in design and installation in the third quarter reflected “the continued challenging environment for larger note purchases.”

However, it said these sales were “stabilizing” after double-digit declines in the first two quarters of 2024. It also reflects the inclusion of Solar Fast sales after Wickes bought a majority stake in the business in March.

Wickes’ retail business has maintained growth, adding 2.2 per cent year to date to £945.3 million, driven by excellent TradePro sales and consumers “catching up to the “Outdoor projects delayed by wet weather during spring and early summer,” the group said. .

Boss David Wood added: ‘Our excellent value for money and service-led offering keeps home improvement professionals coming back to Wickes.

“We have seen satisfactory developments in the retail sector, successful growing volumes and increased market share, driven by particularly strong performance at TradePro.”

This follows a recent update from rival Kingfisher, which told investors that customers repairing, maintaining and renovating their homes are offsetting lower demand for “big-ticket” items such as bathrooms and kitchens.

Motoring and cycling specialist Halfords warned investors on Tuesday that its near-term business outlook “remains uncertain, particularly for high-value discretionary purchases” despite “some improvement in consumer confidence”.

GfK sector figures show consumer confidence fell sharply last month, with the group blaming the looming budget.

Neil Bellamy, head of consumer insight at GfK, said: “Following the withdrawal of winter fuel payments and clear warnings that difficult new tax, spending and welfare decisions will be made, consumers are nervously awaiting the budget decisions of October 30”.

The group’s like-for-like sales were broadly flat in the first half of its financial year as its auto center business, which generates 40 per cent of revenue, faces a “challenging” tire market with customers concerned about prices that fit the budget. range’.

However, it enjoyed “strong growth” in services, maintenance and repair, while sales of motor products in its retail business “proved more resilient than expected.”

Halfords is targeting cost savings of £30m this year in an effort to manage lower consumer strength and higher costs.

Chief executive Graham Stapleton said: “While consumers remain cautious in their discretionary spending, compounded by uncertainty over the content of the upcoming autumn budget, we have continued to focus on controlling the controllables.”

“In this environment, we are focused on optimizing the existing platform to drive near-term profitability, while accelerating our investment in the Fusion concept to position ourselves for growth in the years ahead.”