Retail chain Wickes has reported “continued volume declines” in its core DIY and kitchen and bathroom showroom categories, according to third-quarter figures from parent company Travis Perkins.
“Significant pricing competition” across the sector had prevented the recovery of cost price inflation.
However, pricing pressure has begun to moderate in recent weeks, the report said, and kitchen and bathroom order activity has shown “some early signs of recovery”.
Cost-reduction activities are progressing as planned, with reduced distribution costs and tight control of overhead costs.
But lead indicators, such as secondary housing transactions, house prices and consumer confidence, continue to paint a mixed picture, and as such Travis Perkins remains cautious on the near-term market outlook.
The group will continue to focus on managing its underlying cost base, which underpins its confidence that full-year performance is on track, and in line with market expectations.
The wider picture for the group was one of “solid trading performance in line with market expectations”, the report said. Q3 group total sales were up 3.9% and like-for-like sales grew by 4.1%.
Combined merchant businesses – including the general merchanting, contracts and plumbing and heating divisions – achieved like-for-like growth of 7%.
The group’s share price had been on a downward spiral for most of the year, hitting a low of around £9.70 before rallying to £10.15 on announcing its Q3 numbers.
Travis Perkins chief executive John Carter commented: “Our trade-focused businesses delivered good sales growth against a challenging market backdrop, including successful recovery of cost price inflation. The UK DIY market continues to be very challenging for Wickes, where significant price pressure and weak consumer confidence is providing a tough trading backdrop.
“Across the group, we are making good progress with the cost-reduction activities that were highlighted in July, and these actions are generating positive results and underpin our confidence that our full-year performance is on track and in line with market expectations.”