Floorspace still growing

27.02.2006

Germany’s DIY retailers expanded their combined retail floorspace in the home country by 430 000 m² in 2005

By the end of December 2005 the German DIY retailers had got a total of 104 new DIY stores off the ground (2004: 97), both at home and abroad. There were in addition about 40 re-openings after major renovations and/or extensions. Registered over the same period were approx. 70 DIY store closures and/or takeovers.
The 20 best-performing German DIY retailers in 2005(download .pdf-file)
Following 64 new openings and quite some closures, the total number of outlets in Germany over 400 m² in size went up to 4 219. Which is 36 more than one year previously (4 183). The combined retail area increased by 430 000 m² to 17.666 mio m². This shows a considerable increase in floorspace over 2004, when the growth figure was 101 000 m². The national average at the end of 2005 came to 4.7 inhabitants per square metre of DIY retail space (previous year: 4.8).
New openings abroad in 2005 accounted for 38.6 per cent of the total (40 stores). This represents an absolute high, also in percentage terms, since the beginning of the nineties. This growth is probably compensation for the downswing in 2004 (24.7 per cent and 24 stores). German DIY retailers were represented abroad by 590 stores at the end of 2005.
German DIY retailers abroad(download .pdf-file)
The international expansion in 2005 tended to pass over earlier boom countries like Turkey, Poland and Hungary in favour of Bulgaria, Italy, Romania and Switzerland, which came more strongly into focus. Plans for the future also envisage quite a few more stores abroad. Upon looking back, it becomes evident that the first signs of international expansion in the nineties were relatively timid. For instance, German DIY retailers inaugurated only 1.4 per cent of all new openings beyond their national borders in 1994, but two years later the figure was already 10.9 per cent. If you ask about the reasons for this trend towards moving abroad, the answer is above all that high single- and double-digit sales rates and positive contributions to operating income can still be achieved in a number of countries in eastern Europe and in Russia.
New openings by floorspace
The trend towards newly opened stores having increasingly large sales areas, which has been noticeable for quite some time, intensified in 2005. This resulted in 44.2 per cent of all that year’s new openings having a floorspace between 5 000 m² and 10 000 m² in size (2004: 42.3 per cent). The increase in the category in excess of 10 000 m² turned out to be even more striking: a rise of 4.8 percentage points over the previous year resulted in a total of 33.7 per cent. Taking all new openings in excess of 5 000 m² together, a considerable increase of 6.7 percentage points over 2004 manifests itself in the total of 77.9 per cent.
The proportion of stores between 2 500 m² and 5 000 m² increased slightly during the period under consideration to 10.6 per cent; this figure had been falling continuously in the past, with the exception of 2003 (15.5 per cent). The percentage of all new outlets in excess of 2 500 m² has continued to rise over the previous year’s high level of 79.4 per cent, reaching a new high of 88.5 per cent.
The proportion of all new openings in 2005 belonging to the category of 1 000 m² to 2 500 m² experienced a sharp drop to 1.9 per cent (2004: 12.4 per cent). Stores in the categories below 2 500 m² make up no more than 11.5 per cent of all new openings, whereas the figure was still 20.6 per cent in 2004. Stores below 1 000 m² in size notched up an increase of 1.4 per cent in the period under consideration.
New opening by floorspace(download .pdf-file)
New openings by type of organisation
The DIY retail multiples landed right at the head of the field when it came to new openings in 2005, showing big gains over the preceding year. Both the other groups, the franchise stores and cooperative organisations, suffered considerable losses in consequence. In detail: The DIY multiples accounted for 61.5 per cent of the new openings in 2005; the comparable figure for 2004 was 47.4 per cent. This 14.1 per cent gain is shared between the cooperative and franchised businesses as a loss. At 4.8 per cent the cooperative stores remained far below the previous year’s result of 9.3 per cent. And the share of franchise businesses among the newly opened DIY superstores in 2005 fell off by 9.6 percentage points, from 43.3 per cent in 2004 to just 33.7 per cent.
New openings by type of organsation(download .pdf-file)
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