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Giulia ArrigoniDIY in Europe, Italy,Editor-in-chief, Bricomagazine
The DIY retailers in Italy were able to sustain their rate of growth in 2007, with the result that their total number of stores has now exceeded the 600 mark. On the one hand are the big foreign operators, who last year invested in two directions above all: the modernisation of their existing outlets, and the invasion of locations on the outskirts of major cities. Their efforts have materialised as very attractive new outlets on ideal sites and with new ranges of services. Worth noting here is Leroy Merlin's new "installation service" at the new stores in Fiumicino, Rome and Rozzano, Milan, where professional tradesmen are available to lay floors, install bathrooms, make up curtains and cover sofas for customers, etc. On the other hand, the medium-sized Italian retail operations that offer franchise concepts, such as Bricocenter, Brico Io, Bricofer and Brico Ok, have fuelled a very rapid expansion policy - with Brico Io heading the field. Contributing to this development is the fact that large numbers of traditional businesses have capitulated in the face of the increasingly tough competition, which day after day threatens their sales and their profit margins.And that is not all. Other factors include the majority of the owners of real estate, who expect their property to be put to profitable use, and entrepreneurs in the food business who are keen to pick up profits in the non-food sector. This is proof that the DIY business is a paying proposition that is functioning better than other retail segments. Which is indeed true, the DIY market overall is growing at a moderate rate - 4.5 per cent maximum - but this growth is steady, and the DIY stores in particular are progressing better.Industry analysts are optimistically prophesying years of positive expansion ahead for the DIY stores. Others are beginning to ask questions with regard to the consolidation that is already beginning to become apparent in certain areas, for instance in Rome and its hinterland. Will all the stores survive? Or is the start of a second phase now becoming evident, a stage of consolidation?
The DIY retailers in Italy were able to sustain their rate of growth in 2007, with the result that their total number of stores has now exceeded the 600 mark. On the one hand are the big foreign operators, who last year invested in two directions above all: the modernisation of their existing outlets, and the invasion of locations on the outskirts of major cities. Their efforts have materialised as very attractive new outlets on ideal sites and with new ranges of services. Worth noting here is Leroy Merlin's new "installation service" at the new stores in Fiumicino, Rome and Rozzano, Milan, where professional tradesmen are available to lay floors, install bathrooms, make up curtains and cover sofas for customers, etc. On the other hand, the medium-sized Italian retail operations that offer franchise concepts, such as Bricocenter, Brico Io, Bricofer and Brico Ok, have fuelled a very rapid expansion policy - with Brico Io heading the field. Contributing to this development is the fact that large numbers of traditional businesses have capitulated in the face of the increasingly tough competition, which day after day threatens their sales and their profit margins.And that is not all. Other factors include the majority of the owners of real estate, who expect their property to be put to profitable use, and entrepreneurs in the food business who are keen to pick up profits in the non-food sector. This is proof that the DIY business is a paying proposition that is functioning better than other retail segments. Which is indeed true, the DIY market overall is growing at a moderate rate - 4.5 per cent maximum - but this growth is steady, and the DIY stores in particular are progressing better.Industry analysts are optimistically prophesying years of positive expansion ahead for the DIY stores. Others are beginning to ask questions with regard to the consolidation that is already beginning to become apparent in certain areas, for instance in Rome and its hinterland. Will all the stores survive? Or is the start of a second phase now becoming evident, a stage of consolidation?
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