Movement in the market

The DIY market in Ukraine has an eventful year behind it, having seen the entry of another company. The French chain Leroy Merlin (which belongs to the Adeo Group) opened its first Ukrainian store in November. This features a sales area of 15 000 m² and is located in the capital, Kiev. The attendant circumstances were rather spectacular: the new arrival fought an acrimonious advertising battle with market leader Epicentr, which apparently included hits below the belt at times. The French company intends to open its next store in the course of this current year, and in Kiev again. It looks as though there will be further price wars in Epicentr’s heartland. Last year, as by far the biggest player with a total of 27 branches, the company went ahead with further expansion. Having only launched one new outlet in 2009 – even if that was the biggest DIY store in the world at 56 000 m² (see DIY International 1/2010) – it came up with four new openings in 2010. Three more are planned for the first half of 2011 alone. In pursuit Nova Liniya, in which a member of the German Hagebau Group has a stake, behaved with similar caution in 2009, the year of financial crisis, when it also opened only one new store. Then last year it worked on its strategy of growth along the main trunk routes (see DIY International 1/2011), on expanding its network of stores, adding three new ones to the total of 14 in existence at the end of 2009. One of the new additions is the second store in the Crimean Peninsula on the Black Sea. Three new openings are also on the schedule for 2011. The significance of the two dominant companies, Epicentr and Nova Liniya, can perhaps be made clearer by comparing them with the other players in the entire Non-Food retail sector. The number one player, which is far ahead of the field on the list put together by Pro Retail, a Ukrainian trade magazine, reports sales of UAH 7.3689 bn (approx. € 650 mio); Nova Liniya follows with UAH 2.4386 bn (approx. € 214 mio). Countering the rumour (spread by interested groups, of course) that the company wanted to withdraw from the Ukrainian market, the German Praktiker Group opened a DIY store in the capital, Kiev, in March 2010. One thing that is true, though, is that the first foreign DIY retailer in this country was planning 35 stores before the crisis struck. That figure was just four at year’s end. However, the company has not completely given up its growth plans. According to a recent statement, it intends to…