Waiting for that stimulus

The DIY market in Slovakia is currently struggling against economic conditions that tend to hamper any rapid further development. For although the economy has been growing for three years now, the unemployment rate is still in double digits. Falling real wages, too, are hardly calculated to stimulate the mood of consumers. So private consumption in 2013 will be downward for the third year running, according to a government estimate, which foresees a minus of 0.1 per cent. But at least for 2014 it is basing its forecast on growth of more than one per cent again. For there are also positive indicators: for instance, Slovakian GDP rose by 0.3 per cent in the second quarter of 2013. In the meantime, however, retailing has got little to laugh about. Sales rose only nominally last year, while in the first quarter of 2013 there was a minus of 1.3 per cent in real terms. No stimulus is coming from the construction industry, either. Building output for the year 2013 as a whole is expected to amount to a single-figure deficit, after a decline of 12.5 per cent in 2012. The expectation is for at least a slight increase again in 2014. Like everyone else, the DIY retailers have felt the full force of all these background factors. Market volume fell by 3.3 per cent to € 145 mio in 2012, if one takes the figures in the “Europa Konsumbarometer 2013” from Commerz Finanz as a basis. The European DIY Retail Association, Edra, also estimates last year’s sales deficit at three per cent. This consumer barometer survey refers to an investigation into the buying intentions of consumers when it comes to DIY articles. The figure of 22 per cent that emerged for Slovakia is two points higher than the average for Europe. Slovakian households’ average spend on such products amounted to € 76 in 2012. The year 2013 brought violent downward swings to the development of business in the DIY sector in Slovakia, as in nearly the whole of Europe. According to an estimate from Edra, the figure was -19 per cent in the first six months. Generally, though, the sector can still see opportunities in the Slovakian market. At least one big company is working on its market entry: the German DIY retailer Bauhaus is planning to open an outlet in the capital Bratislava. The market is dominated by Baumax, the Austrian market leader, which only recently renewed its commitment to central and eastern Europe, in spite of the difficult conditions it is meeting with. The company operates 14 stores in Slovakia…