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There are only two DIY retail chains in the home improvement market in Israel. The traditional hardware outlets account for the greater part of overall sales
The Israeli DIY trade has developed from what are known as “Tambourines”, or small hardware shops named after Tambour, Israel’s largest paint manufacturer. The Israel Construction Center estimates that there are more than 1 500 such outlets throughout the country. Operating alongside them are the two DIY chains, Home Center and Ace Hardware.
(.pdf-download)
The traditional small shops account for 80 per cent of the country’s hardware sales, which are estimated differently according to the method used. The Israel Construction Center estimates the market to be worth $ 700 mio, Home Center takes $ 1 bn as its basis and Ace Hardware uses a figure of $ 2.5 bn. The lowest estimate includes only the tools and materials sectors, which are the two main areas of operation for the Tambourines. The highest estimate also takes into consideration the broad range of products for the home in general. Over the last two decades the DIY sector has shown one of the highest rates of growth, second only to the high tech sector.
Home Center
The two DIY chains in Israel, Home Center and Ace Hardware, see opening new stores as the only way to increase their market share. Consequently Home Center acquired the Handyman chain of DIY stores in May 2001, thereby increasing its number of stores from 24 to the current total of 44. Home Center had sales of $ 215 mio in the year 2000 and an operating profit of $ 4.5 mio. Its network of outlets includes four large stores of 4 500 m² each. The company has decided to operate a two-pronged size strategy: on the one hand it intends to open stores of at least 6 000 m², and on the other hand wants to have a presence in town centres with neighbourhood stores of 300 m² to be able to stand up to the Tambourines. However, it is not only expanding in Israel: in 1999 it opened a first store in Nicosia, Cyprus, in conjunction with Woolworth. A second store is to be inaugurated there at Limasol, and the possibilities for further expansion in the Mediterranean region and the Middle East are currently being investigated.
New to the Home Center product offer are private-label paints manufactured by Tambour. The paint market in Israel is estimated at about $ 200 mio annually.
Ace Hardware
Ace Hardware also intends to create a private label for the Israeli market. The private labels managed by the globally active company account for 20 per cent of its total sales, mainly in the areas of paints and tools. Ace operates 20 stores altogether, the three largest of which are each 4 000 m² in size. Five new stores of 2 500 m² each are to be added to the network of outlets in Israel. Expansion towards the west is also a possibility, since US headquarters has given the company the green light to open franchises in Prague and Budapest.
The competition
The competition facing Home Center and Ace Hardware is not only to be found in the traditional hardware business. The big food chains, Cosmos and Universe, have recently set up departments selling tools, electrical lines and watering products. In retaliation, the two DIY chains have incorporated electronics and home textiles such as carpets and curtains in their product offers.
Both chains are also gearing up to confront a possible competitor from abroad: there are rumours in Israel as elsewhere that Home Depot is planning to enter the market.
Women as a target group
Studies over recent years have shown the growing influence of women in making decisions about hardware purchases. Research has also shown that 39 per cent of the women who have visited a DIY store can put together a piece of furniture, change a light bulb, carry out light painting jobs and even plumbing repairs.
(.pdf-download)
These studies come to the conclusion that marketing messages should target women, according to the Israel Export Institute. Something that is already obvious from the advertising campaigns of recent years.
Israel
Population: 6 mio
Area: 20 770 km²
Rate of inflation 2001:1.4 %
Rate of unemployment 2001: 9.3 %
Real change to GDP 2001: -0.6 %
DIY in Europe 11-12/2002
(.pdf-download)
The traditional small shops account for 80 per cent of the country’s hardware sales, which are estimated differently according to the method used. The Israel Construction Center estimates the market to be worth $ 700 mio, Home Center takes $ 1 bn as its basis and Ace Hardware uses a figure of $ 2.5 bn. The lowest estimate includes only the tools and materials sectors, which are the two main areas of operation for the Tambourines. The highest estimate also takes into consideration the broad range of products for the home in general. Over the last two decades the DIY sector has shown one of the highest rates of growth, second only to the high tech sector.
Home Center
The two DIY chains in Israel, Home Center and Ace Hardware, see opening new stores as the only way to increase their market share. Consequently Home Center acquired the Handyman chain of DIY stores in May 2001, thereby increasing its number of stores from 24 to the current total of 44. Home Center had sales of $ 215 mio in the year 2000 and an operating profit of $ 4.5 mio. Its network of outlets includes four large stores of 4 500 m² each. The company has decided to operate a two-pronged size strategy: on the one hand it intends to open stores of at least 6 000 m², and on the other hand wants to have a presence in town centres with neighbourhood stores of 300 m² to be able to stand up to the Tambourines. However, it is not only expanding in Israel: in 1999 it opened a first store in Nicosia, Cyprus, in conjunction with Woolworth. A second store is to be inaugurated there at Limasol, and the possibilities for further expansion in the Mediterranean region and the Middle East are currently being investigated.
New to the Home Center product offer are private-label paints manufactured by Tambour. The paint market in Israel is estimated at about $ 200 mio annually.
Ace Hardware
Ace Hardware also intends to create a private label for the Israeli market. The private labels managed by the globally active company account for 20 per cent of its total sales, mainly in the areas of paints and tools. Ace operates 20 stores altogether, the three largest of which are each 4 000 m² in size. Five new stores of 2 500 m² each are to be added to the network of outlets in Israel. Expansion towards the west is also a possibility, since US headquarters has given the company the green light to open franchises in Prague and Budapest.
The competition
The competition facing Home Center and Ace Hardware is not only to be found in the traditional hardware business. The big food chains, Cosmos and Universe, have recently set up departments selling tools, electrical lines and watering products. In retaliation, the two DIY chains have incorporated electronics and home textiles such as carpets and curtains in their product offers.
Both chains are also gearing up to confront a possible competitor from abroad: there are rumours in Israel as elsewhere that Home Depot is planning to enter the market.
Women as a target group
Studies over recent years have shown the growing influence of women in making decisions about hardware purchases. Research has also shown that 39 per cent of the women who have visited a DIY store can put together a piece of furniture, change a light bulb, carry out light painting jobs and even plumbing repairs.
(.pdf-download)
These studies come to the conclusion that marketing messages should target women, according to the Israel Export Institute. Something that is already obvious from the advertising campaigns of recent years.
Israel
Population: 6 mio
Area: 20 770 km²
Rate of inflation 2001:1.4 %
Rate of unemployment 2001: 9.3 %
Real change to GDP 2001: -0.6 %
DIY in Europe 11-12/2002
