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18.02.2016

Home Improvement: Home Improvement remains stable in 2015

With a bad start in the first quarter of 2015, everybody knew that the Home Improvement market would have to fight the whole year to keep on track. An excellent second quarter in 2015 was the air needed to go full power in the second half of 2015. In Q3 we could perpetuate the results. In the last quarter we seemed to go for a straight win, till the results from November came in. With sales dropping -3.3 % in this month, all the pressure was on a good performance in December.

The Home Improvement sector could close the year with a slight increase of +0.8% for the whole of 2015. We do have to point out that growth is particularly coming from expansion and is not related to organic growth. In units the Home Improvement sector is declining slightly which results in slower rotation in the shops.

So what about 2016? At a certain point the white spots for opening extra shops will become scarce. The big challenge will be to find ways to fire up the organic growth again. Let us take a closer look at the product groups declining in 2015. The first important negative evolution we noticed was all related to paint categories. We all know that paint is one of the driving factors in terms of rotation and turnover in the shops. If the stores and industry cannot turn this back into positive numbers, this will increase the pressure on the whole industry.  Within the DIY superstores we notice a decline of 4% in value.  It is not a shift within the shops to wallpaper. Wallpaper declines with 1.9 % as well. 

Within the power tools we noticed some new trends. The multi-tools turnover, traditionally a segment with strong growth, is totally collapsing in 2015, a decline of almost 15% in value. Is this market saturated? Another strong group, high pressure cleaners, is falling back after a strong 2014. Likewise we noticed a 15% decline in turnover.

On the other hand, we notice a lot of insulation going over the counter, resulting in a growth of +8% in value. When renovating the attic, you also need treated wood. The growth in this category is phenomenal.

LED lamps is again the best performing segment on a m2 shop space. Booming once more in 2015 with more than 40 % growth in value and in units!

Dimitri Vits – Consultant Home & Living

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