The romanian DIY retail market experienced another good year in 2017, benefitting from the country’s continuous economic growth, strong residential construction and consumer loan and mortgage markets, as well as higher private consumption supported by growing wages and purchasing power. As a result, retail sales of renovation, finishing, construction and decoration products in Romania increased by a staggering 8.5% compared with 2016, according to a new report from PMR titled DIY retail in Romania 2017 – Market analysis and development forecasts for 2018-2023.
In 2015 and 2016, romanian DIY retail market growth in Romania also hovered around 8%, which means the situation on the market is very stable. In 2018 and the next few years, the pace of market growth is expected to ease from the record levels observed in 2015-2017, but not very substantially. PMR forecasts that in 2018-2023, DIY retail sales in Romania will grow at an average annual rate of about 5.5%.
It is worth noting that in 2017, retail sales accounted for nearly 54% of the entire DIY market in Romania, which also includes DIY products purchased by institutional clients.
Source: PMR, 2018
Modern retail is dominating the market
The romanian DIY retail market is dominated by modern retail chains. This distribution channel has significantly increased in recent years and it already accounts for over half of the DIY retail market’s value. In the coming years, the channel’s share will grow further.
The recent wave of consolidation, especially pronounced in 2013-2014 and in 2017, has left Romania’s DIY market dominated by a few strong players. The UK-based Kingfisher and France-based Leroy Merlin, after a period of testing the market, significantly expanded their operations in Romania by acquiring competitors. Kingfisher took over the French-owned Bricostore in 2013 and then, in 2017, it acquired the German-owned Praktiker. Leroy Merlin, in turn, bought in 2014 the Romanian division of the Austrian bauMax.
Thus, the top five DIY retail chains in Romania by 2017 sales include two domestic companies, Dedeman and Arabesque (which launched last year a second brand, MatHaus, the retail brand of the company) and three international ones: Leroy Merlin, Hornbach and Kingfisher’s Brico Depot.
Dedeman, the undisputed market leader
Dedeman is the undisputed market leader, with sales exceeding RON 6bn (€1.4bn) in 2017, i.e. over 3.5 times more than second-placed Arabesque. The next three players all recorded similar sales last year, of over RON 600m (€1.3bn). Significantly, the top 5 players by sales accounted for about 44% of the total DIY market in Romania in 2017, and this share is expected to grow further in 2018.
All the major DIY retailers in Romania plan to further grow their chains and strengthen their already very stable position. Leroy Merlin has the most ambitious expansion plans, aiming to double its store count to 30-35 units by 2025.
Dedeman may well remain the leader in terms of store expansion in the coming years. Although it is already close to achieving its target of having 50 stores in Romania, the retailer – which has four stores under construction now – is thinking of launching a smaller store format designed for smaller communities. It is also worth mentioning that a new retail brand, MatHaus, appeared on the market in 2017. Its owner, Arabesque, will be converting some of its eponymous stores to the new banner, and new site openings are also possible.
Romanian DIY retail, future development
Dedeman, the most important player from romanian DIY retail, opened in this september, in Bucharest, the 49th store of the national newtwork and two new units are under construction in Slobozia and Giurgiu. So, soon Dedeman will cross the border of 50 stores in Romania.
Leroy Merlin became since 2017, the number two player in romanian DIY market, in terms of turnover. Leroy Merlin is operating in this moment 17 store in Romania, but next year will open onother store in Bucharest (under construction right now) and two more locations will be chosen for the next two new stores.
Leroy Merlin also will start a click and collect services from 2019 and from 2020 will lunch the online store. Please read the full exclusive interview with Leroy Merlin Romania CEO: https://www.bricoretail.ro/cee-diy-retail/leroy-merlin-click-and-collect.html.
The romanian company Arabesque, the largest player in the B2B market in Romania and the biggest distributor of building materials and finishes, continued to develop the new retail brand MATHAUS with new openings. So, in this moment, beside the 22 Arebesque warehouses, the company operating 7 MATHAUS stores and the focus of Arebesque will be on expanding this new retail brand and the online services.
Hornbach is curently operating 6 stores in Romania (three in Bucharest and one in Brasov, Timisoara and Sibiu) and lounched early this year this online store.
Brico Depôt Romania, part of Kingfisher plc, the international home improvement company, continues to integrate and consolidate its operational activity on the romanian market and begins the process of rebranding Praktiker stores in Brico Depôt units. Thus, in the first part of 2019, Kingfisher will operate the entire romanian network under the Brico Depôt brand. This means that the first and the oldest DIY retail brand from Romania – Praktiker – will disappear.
Romanian DIY retail – a new brand
A new DIY retail brand will be lunch this autumn – HOMELUX – owned by turkish businessman Omer Susli, the former owner of Praktiker network, which will open the first two stores in Ploiesti, with an area of 10,000 sqm, and in Focsani, 6,500 sqm.
This article is part of the CEE DIY retail category from www.bricoretail.ro B2B publication and bring together news, in english, from Central and East Europe related with DIY and home improvement retail.
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