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Swedish Byggmax is a building and DIY retail chain that offers a compact product mix at low prices. This business concept is now being transferred to a franchising option
In 1994 Göran Pettersson and Lars Lindberg founded the first store of the Byggmax chain, which now has a presence in nine Swedish cities: Göteborg, Staffanstorp/Malmö, Helsingborg, Halmstad, Jönköping, Västerås, Umeå plus Täby and Upplands-Väsby in the greater Stockholm area. Today the chain, which is based at Djursholm, generates sales in excess of 24.5 Mio euro (SKr 220 Mio).
The secret of their success is a totally new retailing concept, at least for Sweden, for building materials and DIY products. One major element of the concept is the location of the stores, which are established on good sites outside the city centre in the vicinity of supermarkets and with easy access for customers with cars. The size of the site amounts to about 5 000 m², the store itself covers between 1 800 m² and 1 900 m². The product offer is compact and limited to around 1 300 articles. There is a drive-in where customers can load the goods into their car or trailer themselves. The stores are open seven days a week. With regard to pricing, the company claims to offer a range 20 to 25 per cent cheaper than other Swedish builders’ merchants or DIY retailers.
Highly computerised
Lars Lindberg explains that the administration is highly computerised in the areas of both sales and logistics. This results in the employment of less personnel at head office than usual. Also the products are ordered once a year for the whole chain, which has a positive effect on pricing.
“At first we were regarded with scepticism by the “established” retailers,” says Lindberg, “but now we are serious competition for them. The suppliers are very interested in our customers because our turnover speed is high. We don’t have any “shelf-warmers” here.”
No losses through customers
As Byggmax does not offer any customer credit, losses from bad debts are zero, even though not only private customers buy there. Many small builders have recognised the advantage of being able to buy more cheaply, especially by credit card. Customers spend an average of 56 euro (SKr 500) in the stores.
Wood is the main product category, but the stores offer a whole range of building materials and other products. Seasonal articles such as fertilizers or soil, etc., also form part of the assortment.
The concept has over the years proved to be successful. Now the founders have gone one step further and are offering it as a franchising format. The chain’s latest branch at Umeå is run as a franchised store and there are more to come.
The secret of their success is a totally new retailing concept, at least for Sweden, for building materials and DIY products. One major element of the concept is the location of the stores, which are established on good sites outside the city centre in the vicinity of supermarkets and with easy access for customers with cars. The size of the site amounts to about 5 000 m², the store itself covers between 1 800 m² and 1 900 m². The product offer is compact and limited to around 1 300 articles. There is a drive-in where customers can load the goods into their car or trailer themselves. The stores are open seven days a week. With regard to pricing, the company claims to offer a range 20 to 25 per cent cheaper than other Swedish builders’ merchants or DIY retailers.
Highly computerised
Lars Lindberg explains that the administration is highly computerised in the areas of both sales and logistics. This results in the employment of less personnel at head office than usual. Also the products are ordered once a year for the whole chain, which has a positive effect on pricing.
“At first we were regarded with scepticism by the “established” retailers,” says Lindberg, “but now we are serious competition for them. The suppliers are very interested in our customers because our turnover speed is high. We don’t have any “shelf-warmers” here.”
No losses through customers
As Byggmax does not offer any customer credit, losses from bad debts are zero, even though not only private customers buy there. Many small builders have recognised the advantage of being able to buy more cheaply, especially by credit card. Customers spend an average of 56 euro (SKr 500) in the stores.
Wood is the main product category, but the stores offer a whole range of building materials and other products. Seasonal articles such as fertilizers or soil, etc., also form part of the assortment.
The concept has over the years proved to be successful. Now the founders have gone one step further and are offering it as a franchising format. The chain’s latest branch at Umeå is run as a franchised store and there are more to come.
