Troublesome lobby

OBI franchisee Migros has further stores in the pipeline: the spring of 2001 should see the opening of one store in Volketswil followed by two more locations in the autumn of 2001, at Oftringen and Winterthur to be exact. The opening of at least three stores is planned for the year 2002 according to Lorenz Peter, director of the OBI division at the Migros cooperative association in Zürich. The new openings with a floorspace from 9 000 m2 to 10 000 m2 are to be somewhat larger than the prototype store at Dreispitz in Basel, which opened for business at the beginning of last year. Peter is pleased with the way things have gone in Basel, and especially with the two OBI strategies offering plant hire and contractor contacts, services that are so far unique in Switzerland. “Things are running most successfully. We have been able to fill an existing gap in the market and will be offering the same services in future OBI stores.”
The first OBI opened in Basel in early 1999, the next is to follow at Volketswil in the spring of 2001.
Building materials and structural elements are again to be prominently positioned in the new stores, though it will take some time before these ranges are fully accepted as part of the standard product offer in DIY superstores by DIYers or trade customers in Switzerland. Despite this, however, the progress being made by these product categories in Basel is most satisfactory. Above all gardening, lifestyle and home enhancement product categories are available at the Swiss OBI, along with the traditional DIY ranges.
Actually this year should see one more OBI inaugurated in Switzerland. However, environmental organisations have a strong lobby and can delay such projects tremendously, despite the existence of planning permission. For example, the Verkehrsclub that wants the 10 000 m2 store in Winterthur to have parking for only 200 vehicles instead of the planned 500. The club hopes by this means to keep down the volume of traffic.
Though it is true that OBI offers its customers a home delivery service, 90 per cent of those frequenting the DIY superstore come in their own cars.
About 10 per cent of OBI’s customers are trade purchasers. This business still continues very much to be the province of traditional builders’ merchants. Director Peter sees problems both in the cartel-like structures within the Swiss building materials trade and in the price-fixing practice of importers, which has been declared legally acceptable.
Three questions put to Christian Vogel, divisional manager of Do It & Garden Migros:
Will the Swiss DIY market change in a lasting way in the years to come?
The following factors will influence the market: authorisation procedures will become more difficult, individual large-format stores will be established and the market volume will increase slightly.
What do you see as the greatest challenge for your company?
The greatest challenge for Do It & Garden Migros will be to maintain the pace of expansion.
Which goals have you set yourselves for the next three years?
One of the goals of Do It & Garden Migros is the optimisation of our merchandise management system.