Finland: Hardware Trade showing Good Growth.

In Finland the third quarter of the building and home improvement trade continued to develop positively, with growth reaching 2.5%. The cumulative growth for the first half of the year stands at 6%.

Data from the Finnish DIY Retail Association RASI ry has shown that the soaring growth rates of spring and summer have now leveled off, but growth is continuing.

Minna Liuksiala, CEO of RASI ry, said “The growth of consumer sales and, on the other hand, the slowdown in the growth of professional sales can be seen more and more clearly. The slowdown in new construction has been predicted for a year by a sharp decline in the number of building permits. On the consumer trade side, the largest increase in late summer and early autumn, still over ten percent, was achieved in yard and garden products as well as tools and supplies that consumers use for independent renovation.”

www.epressi.com

Europe: Kingfisher Release Half Year Results To 31 July 2020.

Kingfisher have released their half year results for the six months ended 31 July 2020.

The results demonstrate a resilient performance in H1 with strong sales recovery in Q2 as well as a stronger demand for home improvement across their markets. However, sales were down 1.1% in constant currency, reflecting adverse impact of COVID-19 in Q1 being partially offset by strong recovery in Q2.

In its home market in Great Britain and in Ireland the DIY retailer increased sales by 3.7 per cent (like-for-like: 2.4 per cent) to GBP 2.753 bn (EUR 3.002 bn). Furthermore, E-commerce sales at Kingfisher are up 164%; now representing 19% of total Group sales in comparison with 7% last year.

Chief Executive Officer, Thierry Garnier, said: “We delivered a resilient financial performance in the first half of the year, with the adverse impact of COVID-19 in Q1 offset by a strong recovery in Q2. This recovery has continued into Q3 to date, with growth across all banners and categories.” He continued “The crisis has prompted more people to rediscover their homes and find pleasure in making them better.”

www.kingfisher.com

Europe: Hornbach Maintains Strong Growth In Second Quarter Of 2020/21 & Opens Its Seventh Branch In Romania.

The Hornbach Group benefited once again in the summer months from consumers spending more time in their own four walls, a trend that has been intensified by the coronavirus pandemic.

At Hornbach Baumarkt AG, which operated a total of 160 DIY megastores with garden centers and online shops in nine European countries as of August 31, 2020, like-for-like sales net of currency items grew by 20.6 % to Euro 2,949.0 million in the first half (2019/20: Euro 2,444.7 million). On a like-for-like basis and net of currency items, the DIY stores with garden centers generated sales growth of 19.4 % in the first six months.

Further to this, the seventh branch of Hornbach in Romania will open its doors in Oradea on September 30, 2020.

“Despite temporarily closed markets in several European countries, we have been able to record positive business development in the course of the corona pandemic. With above-average sales growth, the six Romanian stores, which were allowed to remain open all the time, played a significant role in this,” said Hornbach Baumarkt CEO Erich Harsch.

In the coming years Hornbach is planning further openings in Romania, including stores in the Black Sea metropolis of Constanța and in the country’s second largest city, Cluj-Napoca.

 

Japan: Japanese Home Improvement market-2019.

According to the Diamond Home Center magazine in Japan, the total sales of Japanese home improvement industry in FY2019 hit a record high for the second year in a row, reaching  JPY3.9 trillion, falling just short of the JPY 4 trillion wall.

However, the market as a whole is not on the same trend. Although some major companies, such as Cainz and Kohnan, have contributed to the increase in total sales, many companies have continued to remain flat.

In contrast, the total number of stores increased by 11 (excluding the Ken-Depot 66 stores consolidated by Kohnan) to 4,812, but the pace of growth has been declining over the past few years.

In the past, major companies were actively opening new stores, but more and more companies are now shifting their investment into the digital field and renovating existing stores. The trend of steering clear of new store openings is likely to continue in the future.

Australia and New Zealand: Bunnings demonstrate positive growth.

Australia’s DIY market leader, Bunnings, increased its revenue in financial year 2019/2020 (ending: 30 June 2020) by 13.9 per cent to AUD 14.999 bn (EUR 9.11 bn). Total store sales rose by 14.7 per cent, store-on-store sales growth, which excludes stores that were impacted by temporary closure in New Zealand, also amounted to 14.7 per cent.

Bunnings Managing Director, Michael Schneider, commented on the results today: “These strong results reflect the hard work of our team and continued support from our suppliers. There is no doubt that the second half of the year has been challenging, with many of our team and their local communities impacted by the bushfires in late 2019 and early 2020. COVID-19 has also presented our team with some significant challenges and I would like to thank all of them for their incredible hard work and their commitment to keeping themselves, each other and our customers safe,”

During fiscal 2019/2020, Bunnings opened nine new warehouses, two smaller format stores and acquired six stores as part of the Adelaide Tools acquisition. Bunnings closed 13 stores, including ten underperforming stores in New Zealand, and converted one New Zealand small format store into a trade centre. At the end of the period there were 274 warehouses, 68 smaller format stores and 30 trade centres in the Bunnings network and a further 16 stores under construction, as well as six Adelaide Tools stores.

USA: Lowe’s sales grow by a third

In the second quarter (ending 31 July 2020) of financial year 2020/2021, Lowe’s – the number two in the USA and worldwide – increased its sales compared to the same period last year by 34.2 per cent and made sales of USD 27.302 bn (EUR 22.927 bn). Comparable sales for the US home improvement business increased 35.1 per cent. The company completed the first half of the year with sales to the amount of USD 46.977 bn (EUR 39.449 bn) and thus a plus of 21.3 per cent.

In its quarterly report, Lowe’s emphasised the financial cost involved in reacting to the pandemic. In the second quarter, the company invested USD 460 mio (EUR 386 mio) in the support of front-line hourly associates, communities and store safety. Through the first half of 2020, Lowe’s has invested USD 560 mio (EUR 470 mio) in Covid-related financial support for its associates and USD 100 mio (EUR 84 mio) in community pandemic relief, with a focus on minority and rural small businesses and health care workers. Additionally, the retailer’s second quarter performance resulted in a record quarterly “Winning Together” profit-sharing bonus for its hourly associates at 100 per cent of its stores, which totalled USD 107 mio (EUR 90 mio).

USA: Ace Hardware reports record growth in the second quarter

The U.S. cooperative Ace Hardware is the latest business to report record sales during the Covid-19 pandemic. Its affiliated independent hardware stores in the USA have reported a 35.3 per cent increase in like-for-like sales. This growth was the result of a 14.4 per cent increase in same-store transactions and an 18.2 per cent increase in average ticket.

According to the company, Ace stores in the U.S. benefited from increased do-it-yourself activities by consumers sheltering in place, a shift in discretionary spending from travel and entertainment to home improvement, and consumers moving their purchases online and consolidating their store visits in order to limit potential Covid-19 exposure.

Overall sales rose by 35.1 per cent to USD 2.2791 bn (EUR 1.9238 bn). USD 1.0299 bn (EUR 870 mio) of this was accounted for by central wholesale sales, which increased by 32.8 per cent. The stores operated by the central office achieved retail revenues of USD 249.2 bn (EUR 210.4 mio), equivalent to an increase of 57.0 per cent.

Ace’s e-commerce sales have increased almost six-fold (plus 493 per cent).

“There is certainly both a blessing and a burden in being essential,” said John Venhuizen, president and CEO. “My earnest thanks to our drivers, warehouse specialists, red-vested heroes and the entire Ace team. Our efforts to support our stores and serve our neighbours have been imperfect during this pandemic, but the sincerity, efficacy and compassion with which it was delivered was exceptional and appreciated.”

However, the International branch of Ace has not seen the same growth as the US. While hardware and home improvement stores were considered “essential” and were allowed to remain open throughout the U.S., that was not the case across much of the world. Up to fifty per cent of the stores operating outside the USA by Ace Hardware were closed at some point during the quarter. As a result, the wholesale sales of the central business with its foreign partners declined by 0.8 per cent.

 

USA: Amazing 2nd Quarter Results at The Home Depot.

“I’ve never seen a quarter like this” analysts have said about the results posted by The Home Depot. Like for like sales are up by 25% compared to last year. It is thought the one of the main reasons behind this incredible growth is that customers are stuck at home during the coronavirus pandemic and are enjoying a “summer at home” tackling home improvement projects they have previously put off.

Net Earnings at The Home Depot are $4.3 Billion compared to $3.5 Billion and earnings per share have increased by 26.8 per cent.

The Home Depot has also announced that it will open three new distribution centres in Georgia over the next 18 months to support the growing demand for flexible delivery and pick-up options for professional and DIY customers.

In 2017, the company announced a USD 1.2 bn (EUR 1.02 bn) investment to expand its distribution network with approximately 150 new supply chain facilities nationwide, with the goal of expanding the company’s existing same-day and next-day delivery options to 90 per cent of the US population.

The company is also working to make online shopping easier. How successful The Home Depot has been in this regard is shown by the increase of more than a billion dollars in revenue from online sales in the last six months.

In the first quarter of 2020, online sales increased by as much as 80 per cent, due in part to the effects of the Covid-19 pandemic. Interestingly, 60 per cent of customers collect their online purchases from the store.

 

South Africa: Cashbuild Accquire The Building Company.

EDRA/GHIN Member, Cashbuild, is pleased to announce that it has entered into a definitive sale and purchase agreement to acquire 100% of the issued share capital of The Building Company Proprietary Limited (TBC).

TBC is a leading Southern African building materials retail and wholesale business, providing a full spectrum of services through its portfolio of 13 well-known brands across its three divisions. TBC has an established presence across the coastal regions of South Africa, comprising 160 TBC outlets and 21 franchise stores

In the prior financial year ending 30 September 2019, TBC achieved revenue of c.R8.2 billion across the retail, wholesale and specialised divisions. In the twelve month period ended 31 March 2020, TBC achieved revenue of c.R8.0 billion.

Cashbuild’s management identified geographic expansion and incremental access to additional segments of the market as key areas for potential growth. An acquisition of TBC allows Cashbuild an opportunity to drive these growth initiatives while still maintaining its commitment to its customers in the South African and neighbouring markets.

Japan: DCM HLDGS Demonstrate Significantly Increased Sales and Profits in Q1.

DCM HLDGS posted an 8.8% YoY increase in sales to JPY124 billion in March-May, partly due to the favourable impact on sales due to Covid-19, as seen in many countries throughout the world. DIY Retailing has been classified as essential retailing in Japan.

The number of DCM-branded items increased by 3,400 SKUs from the same period last year, now making up some 23,300 SKUs, and the improved mark-up rate has pushed the gross profit margin upward 0.9 points YoY to 33.9%.

On the other hand, the SG&A expense has been cut down by 2.6 points YoY to 26.0%, partly due to a reduction in newspaper flyers as the company refrained from aggressive sales promotion during the height of the pandemic. As a result, operating profit was up YoY by 70.4% to JPY11.6 billion.

The sales of gardening, DIY projects and infection-prevention-related products have significantly increased due to the stay-home and remote work trends seen in Japan.