Dallas, TX: ReportsandReports announce DIY and Home Improvement Retail in Europe: Market Size, Retailer Strategies and Competitor Performance Market Research Report in its Store. Browse complete Home Improvement Retail Market Report Across the continent housing markets have been in decline over the last couple of years and credit has become very hard to obtain. Partly as a result, DIY expenditure across the EU has tumbled 4.5% in 2009. The result is a DIY and home improvement sector which is back at 2004 levels of expenditure. However, many trends on the horizon provide great opportunities for retailers and sector recovery. Scope Highlights Climate change has taken on a hugely significant role in all governmental policies. DIY retailers are in a perfect position to capitalise on the growing trend for going green with many implementing new sustainable initiatives. For example, Groupe Adeo has launched its Kbane banner dedicated to green products and services for the home. With a value in excess of Euro 37 billion, Germany remains by far the largest market by DIY expenditure and benefitted from a comparatively resilient 2009 with a nominal 1.2% fall. It is host to three of the largest DIY retailers in Europe, OBI, Praktiker and Bauhaus, which all continue to expand aggressively across the CEE region. Reasons to Purchase Table Of Contents Summary Executive Summary Europe’s economy is emerging from the aftermath of a brutal recession Naturally, the DIY market was in no position to escape this malaise Hard DIY is suffering, while the homing trend and gardening are offering some respite Despite the significant headwinds, DIY retailers continued to expand their store estates 2010 should be a better year for the sector and the whole industry What to do now – private label provides an opportunity to improve margins A flexible supply chain would help retailers sell the right products at the right time Online is growing right through the recession; the next step is applications Environmental targets and trends are presenting numerous growth opportunities DIY Market Structure The European DIY market is in its second year of decline Specialist sales are following the downward trend Specialists’ selling space is showing a much slower pace of contraction Sales densities are also continuing to fall Store numbers are continuing to show long-term decline The DIY Market in France The French market is down by 3.0% for the first time in 15 years Recent key developments – major players are growing sales through store openings In March 2010 Bricorama reported growth, mainly driven by new space Q4 sales at Kingfisher were down In February 2010, Mr Bricolage reported stagnating sales In October 2009, Mr Bricolage acquired Le Club-les Briconauts in France Shares of DIY retailers in France – Leroy Merlin is the dominant DIY retailer Leroy Merlin France now has an annual turnover of more than €4.5bn Kingfisher France saw a reversal of fortunes for its two fascias Outlook for DIY retailing in France – poor consumer spend will restrict organic growth The French DIY market’s fortunes will be sharply influenced by the macroeconomic picture in the country Unemployment is too high, the housing market is weak, and overall consumer confidence is down There is no easy alternative into growth, as opening new DIY sheds remains difficult The outlook for trade specialists remains grim in the short term More consolidation is on the cards, especially from smaller operators The DIY Market in Germany The German market has enjoyed a good year despite the crisis A greater focus on smaller ticket items would work well Gardening is growing strongly Consumers are saving energy through renovation Recent key developments – performance was mixed among the key players In March 2010, Praktiker announced its results for 2009, showing a decline of 6.2% to €3.7bn Also in March, Hornbach announced that it continued to grow through the recession Shares of DIY retailers in Germany – the main players continue to invest in expansion OBI remains the market leader in Germany The challenge from Praktiker is faltering-for now Bauhaus’ store proposition is ideally suited to tradesmen Outlook for DIY retailing in Germany – although 2010 will be weak, the future is promising Macroeconomic recovery is on shaky ground, but the DIY outlook appears to be relatively benign Short timing has kept unemployment on an even keel The savings rate is high, the residential market is down, and confidence recovery is on shaky ground The DIY market got off to a slow start to 2010 Sales densities are under pressure Environment stimulus is promising for future growth The DIY Market in Italy The crisis has caused a standstill in the Italian market Recent key developments – Groupe Adeo is making gains in the market In April 2010, Leroy Merlin reported double digit growth In May 2009, the second Bricoman store opened in Italy Shares of DIY retailers in Italy – Groupe Adeo dominates the market Outlook for DIY retailing in Italy – expenditure is being hampered by entry of discounters Italy’s economy is on shaky ground Disposable income is falling, unemployment is getting worse, and savings are down House prices are coming under pressure A rise in discounting is posing a threat to DIY specialists Developing an upmarket positioning will help DIY retailers to boost sales Offering a good service will also contribute to increasing sales per store The DIY Market in Spain The DIY market is collapsing as the recession is taking hold Recent key developments – value DIY players are expanding in the market In March 2010, El Corte Inglés announced its intentions to accelerate the roll out of Bricor In March 2009, Leroy Merlin reported a sales decline for 2008, a portent of things to come for Spanish DIY Brico Depot is seeing signs of improvement DIY groups are laying out their expansion plans Leroy Merlin is seeing long-term potential in Spain, and is planning further expansion Shares of DIY retailers in Spain – new entrants are gaining share Outlook for DIY retailing in Spain – the economic climate remains gloomy Spain is still in recession, but inflation is slowly rising A rise in VAT is imminent and unemployment remains exceptionally high The property market has tanked Relying on a booming housing market is a thing of the past for DIY retailers The DIY Market in the UK The UK market is suffering a brutal decline UK DIY is being saved by gardening DIY retailers are benefiting from the difficulties faced by furniture specialists Competition is intensifying This is being heightened as grocers and general merchandisers gain market share Recent key developments – the main players have reported positive results In March 2010, Kingfisher reported positive results, but warned of tough times ahead In 2009, Home Retail Group announced that Argos and Homebase increased total sales In August 2009, Focus secured the backing of creditors for its proposed company voluntary arrangement Shares of DIY retailers in the UK – B&Q commands over a quarter of the market Outlook for DIY retailing in the UK – value and green issues will take greater precedence DIY demand is unlikely to rebound in the short term The Big Four are responding to a changed consumer mindset DIY will remain price competitive and value driven, but will gain some impetus from the eco theme Strategic Issues The downturn has resulted in a changed retail landscape for the DIY sector Housing market growth across the EU has slowed to a crawl and in some cases started to retrench Most DIY specialists are reacting well to the changed consumer Energy efficiency will have a major impact on the future development of the European DIY market The online channel has clearly outperformed for retailing all the way through the recession The housing market is going south, the first synchronised fall in the EU The solution is to focus on smaller projects… and on gardens, as barbecue sales growth continues across most EU markets Energy efficiency and carbon footprint reduction are other growth drivers Depending on incentives, solar panels could achieve mass take-off in UK Consumers are demanding green products and services Europe’s largest DIY players have already begun to incorporate the green agenda into their offers B&Q is pledging a carbon emissions cut in 2010 B&Q still needs to give its One Planet Home range greater focus Groupe Adeo has developed its Kbane banner Rautakesko, Hornbach and Bauhaus all offer guidance on saving energy in the home Online, from click and collect to apps, has been outperforming B&Q has developed an online proposition… and has also rolled out a reserve and collect service Homebase has also rolled out reserve and collect… and is developing online marketing campaigns Praktiker aims to become a multichannel retailer Apps present the next step in the internet evolution Kingfisher Retailer summary – Kingfisher is the world’s third largest DIY retailer Europe’s biggest DIY retailer has a strong presence in UK and France Recent key events – Kingfisher is focusing on strengthening its existing store networks Kingfisher has exited Italy Showrooms have become a key feature for B&Q B&Q is targeting trade customers through new TradePoint store-in-stores Kingfisher has launched an Eco Shop Staff can gain a green qualification from B&Q Eco brands are being increasingly promoted in-store Castorama has developed an iPhone app The inner-city store format on the Continent is now being launched in the UK Financials – strong growth is continuing, despite the crisis Stores – growth in emerging markets is picking up Outlook – multichannel and improved customer service will help to maintain sales growth Kingfisher is focusing on becoming more of a specialist in the DIY field Multichannel is becoming a greater focus for Kingfisher Groupe Adeo Retailer summary – Leroy Merlin is the core fascia of Europe’s second largest DIY retailer Groupe Adeo operates eight DIY and homeware store brands The retailer offers a range of services in its stores Recent key events – the Leroy Merlin concept continues to be diversified New Leroy Merlin eco store formats have been launched in France and Spain Leroy Merlin stores are being downsized In-store services have been improved in Leroy Merlin’s stores in Italy Leroy Merlin has launched its own blog Groupe Adeo has acquired Kingfisher’s store estate in Italy Financials – the group is maintaining double-digit sales growth Stores – continued expansion has taken place across all markets Outlook – Groupe Adeo will continue to diversify away from its core DIY categories Homewares and decorative products will become an increasingly prominent category Continued format and product diversification is key to Group Adeo’s growth OBI (Tengelmann) Retailer summary – OBI is Germany’s leading DIY retailer OBI is expanding rapidly in the CEE OBI stores take the form of large out-of-town warehouses OBI is a hard DIY retailer focusing on renovation and home maintenance products Services on offer at OBI include floor fitting and tool rental services Recent key events – OBI is driving spend by enhancing in-store products and services 180 ATMs have been installed in OBI stores in Germany OBI is no longer expanding into Greece OBI’s gardening assortment is being expanded across Germany Financials – OBI’s stores in CEE outperformed its domestic network Stores – Romania and Ukraine are the newest markets for OBI Outlook – OBI will benefit from targeting growth markets, but mustn’t forget its core market OBI is continuing to target growth markets OBI’s hard DIY focus in Germany is resulting in weak sales growth Praktiker Retailer summary – Praktiker holds an 8.5% share of the DIY market in Germany Praktiker positions itself in both the value and high-end price segment Praktiker operates from two store formats Private label will account for 30.0% of sales in 2010 Praktiker is gearing itself toward an EDLP proposition Max Bahr’s higher prices are justified by a variety of specialist DIY services Praktiker hopes to become a multichannel retailer Recent key events – online and private label are being further developed abroad Praktiker entered Albania in 2009 Private label ranges are being expanded outside of Germany Loyalty cards are being enhanced at both Praktiker and Max Bahr Praktiker is trialling online in Hungary Max Bahr is extending its partnership with Küche&Co Financials – the Max Bahr store format is outperforming Praktiker Stores – store expansion is continuing despite the poor financial performance Outlook – Praktiker will continue to enhance its existing store network Store consolidation has become the name of the game Bauhaus Retailer summary – Bauhaus is Germany’s third largest DIY retailer Bauhaus is mainly present in Germany, but is growing strongly in Scandinavia Bauhaus operates from a large store format In-store products are very much geared toward the hard DIYer Gardening centres and drive-in arenas are being extended to more Bauhaus stores in Germany Recent key events – Bauhaus is continuing its store and network expansion Bauhaus entered Estonia in April 2010 A new large format store has opened in Kalk, Germany Financials – sales have been squeezed by strong price competition in Germany Stores – 60% of Bauhaus’ store network is situated in Germany Outlook – Scandinavia will make increasingly larger contributions to total revenues Scandinavia will become a core region for the retailer Appendix Definitions Abbreviations Methodology Ask the analyst Verdict Research Consulting Disclaimer Browse complete Home Improvement Retail Market Report Browse all Retail Market Browse all Verdict Market Research Reports Browse all Latest Reports Related Reports: Health and Beauty Retail in Europe: Market Size, Retailer Strategies and Competitor Performance Childrenswear Retail in Europe: Market Size, Retailer Strategies and Competitive Success Home Improvement Retail Market in Egypt About Us: Contact:
In the majority of EU countries, expenditure on DIY products fell back in 2009. While Austria, Poland and Belgium were the most resilient, the markets in CEE and the southern European countries saw the sharpest declines, with Spain and the Baltics suffering from falls in expenditure in excess of 14%.
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DIY and Home Improvement Retail in Europe: Market Size, Retailer Strategies and Competitor Performance
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