A YEAR IN REVIEW: INDUSTRY COMMENT


“CONTINUED GROWTH IN HOME IMPROVEMENT RETAILING GLOBALLY” EDRA/GHIN general secretary John Herbert looks at trends and developments within the home


improvement sector on a global scale. “EDRA/GHIN


has partnered


with the Federation of European DIY


Manufacturers (Fediyma)


in producing the Global Home Improvement Report 2018 for the first time. The report values the global sales of home improvement retailing in 2017 at €589billion; an increase of almost 4% compared to 2016.


The main growth has come


from the USA, where Home Depot, with sales of €89.5billion and with 15% of the global market,


reported a sales


increase of 7%, followed by Lowes, with sales of €60.9 and 10% of the global market and which reported a sales increase of 6%! Canada, with the third- largest home improvement market, showed an increase of


5%, whilst Japan was down 6%. The largest markets in Europe: Germany, France and the UK, were almost stagnant, whilst sales in Eastern Europe led the field, with Bulgaria enjoying 15% growth and Poland up 11%, followed by Finland showing 10% growth and Italy and Spain both reporting an increase of 7%. Sales online continue to surge ahead, with an estimated sales increase of well over 25%.


It is


encouraging to see this online sales growth, especially amongst traditionally ‘bricks and mortar’ retailers, who are generally investing heavily in digital infrastructure.


EDRA/GHIN expects this trend to continue, with traditional home improvement retailers ‘clawing


back’ some of the lost ground in online sales compared to purely online specialists, such as Amazon. For example, the Home Depot has recently reported online sales of €5.94billion, or 6.7% of total sales! I remain optimistic that the


growth in sales in the home improvement


retailing market


will continue, and that “the offer” to the consumers will improve further due to the convenience of online purchase. I also predict that ‘the offer’ in the bricks-and-mortar stores will become more inspiring to shop, with the stores becoming more attractive and providing more showroom character. Tomorrow, the winners in the home improvement sector will be


the consumers who will have an increasingly more attractive offer and those retailers who can adapt and become more innovative to change in this rapidly-evolving market place.


Meanwhile, EDRA/GHIN has


reported its best year ever with six new members joining the network in 2018. These are; the Japan DIY Association, the International Hardware Association, EDIN the European B2B Network, Moki Vezi in Lithuania, Megatek in


Abania


and ManoMano, the French online market place operating in Western Europe.


EDRA/GHIN now has 179 members operating 28,000 stores with members sales of €280billlion.”


“THE INDUSTRY RESPONDS TO A TOUGH RETAIL ENVIRONMENT”


Specialist garden centre property consultants Mike Gilbert and Allen Evans of


Gilbert Evans round up the year for the UK garden centre market “2018


has been marked by


significant events for the garden centre industry: dramatic changes in weather, the UK’s largest garden centre group going on the market, the opening of two new leisure destinations by major operators, and on-going economic concerns. It has been a roller coaster


year, with weather conditions ranging from plummeting lows to extreme highs.


February and


March brought unusually low temperatures and heavy snowfall – the worst possible the


start year, to with many operators


fearful of the long-term impact on trading figures. Then the long, hot summer boosted sales and brought much-needed relief. There has been a continued rise in the popularity of leasehold transactions. In May, after much speculation, Terra Firma announced its decision to put all


www.diyweek.net


of Wyevale’s 145 centres on the market. At the time of writing, 37 centres have been sold. As part of Blue


Diamond’s


financing plan to acquire eight Wyevale centres, we advised BlackRock Investment Management on the sale and leaseback of three centres. Back in 2015, we guided BlackRock Real Estate on its £112million purchase of a portfolio of eight garden centres and this year’s investment


demonstrates that


the industry continues to be an attractive market. Blue Diamond’s portfolio now totals 30 centres, following the acquisition of Nailsworth Garden Centre and Orchard Park. Other transactions include Perrywood making the move from being a single-centre operator and acquiring Wyevale’s Sudbury site. Capital Gardens’ acquisition of Hillview’s Studley Green brought


its number of centres to four across the Southeast. This year has provided more of


evidence the on-going


evolution of garden centres, as the industry responds to a tough retail environment, creating all- year round destinations


that


attract higher footfall and are more resilient to weather impacts. East Bridgford Garden Centre opened to much acclaim, following Blue Diamond’s agreement to a 35-year lease from Edward Tarbatt and a £4.5million fit-out. Restaurants, a play barn and a farm shop all contribute to Blue Diamond’s optimism that the centre will produce over


£10million in its


first trading year. Barton Grange opened its own mixed leisure destination, the Flower Bowl. Facilities include a curling rink, 10-pin bowling, a cinema, crazy golf, a restaurant, a fish-and-


chip restaurant, an ice cream


and coffee shop and two golf simulators – not forgetting the pre-existing garden centre. Hillier also showed it’s resilience to the year’s challenges with a record turnover year.


Looking ahead, 2019 should see the Wyevale sale process conclude, with private equity companies, existing operators and local buyers all potentially remaining in the mix. With Brexit


news, the industry is considering many


options impact.


Consumer confidence, technology, the living wage and the environment will challenge the industry, but we are confident that agility, ingenuity and resilience will remain the


critical qualities for


well-run centres to weather any kind of turbulence that next year might bring.”


14 DECEMBER 2018 DIY WEEK 13


dominating to mitigate


the its


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