Obi is back in the game

Obi is the No. 1 DIY retail brand in Germany. Even a phase of about five years that featured planning uncertainty, diverse changes of direction and hasty personnel decisions has not altered that fact. The German public continues to see the DIY retailer from the Bergisch district as the dominant brand name when it comes to DIY superstores. To start with, the bare figures definitely speak for Obi. The company, with gross sales valued at more than € 3.5 bn, is positioned around € 400 mio ahead of Praktiker, the biggest competitor, with its three channels of distribution (Praktiker, Extra and Max Bahr). Third-placed Bauhaus lags over a billion euros behind. However, such figures alone say nothing about a company’s true positioning in the marketplace. For a long time Obi was so preoccupied with its own affairs that it was unable to send out any powerful signals to the industry. There were problems with logistics and with bulk bundling, trouble with the franchisees, who wanted greater insight into the distribution of profits, notes of discord in national advertising, anger among the staff at the Wermelskirchen head office, especially in the national sales and marketing department, unclear and misleading remarks from Obi’s top management on the development of the franchise system. All this to the delight of the company’s German rivals who, like Praktiker boss Wolfgang Werner, disputed Obi’s market leadership in Germany or, like Soltau-based Hagebau, mounted a massive charm offensive to beguile Obi’s franchisees. This seems to have changed now, mainly due to the fact that the intertwined links between the powerful German franchisees and head office have been put on a new footing. All franchisees have signed the new franchise agreement. Proceedings against their own head office have been withdrawn. Agreement has been reached on marketing and online business, and the franchisees are even full of praise for the company’s growth strategy and product range development. Apparently there has also been success in improving yields considerably. Obi members are now puffing out their cheeks and have even announced their intention of going poaching among the franchisees of rival companies. There is life in Germany’s DIY market once more. Download: