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Russians do not save on repairs and cottages

Profit of DIY retail chains located in Russia turned out to be better than estimated last year. The experts predicted that in the end of 2014 DIY market in Russia would grow 6% in rubles, that is the minimum of the years before. However, the growth got to 10% (1,5 bln rubles), which is bigger then the growth in 2013. The representative of the leading DIY retail network in Russia Leroy Merlin has pointed out, that despite the crisis the demand for home products and mending goods has not fallen sharply. Since the prices for travelling abroad have risen, more people prefer to spend their holidays at home or in summer cottage, investing money in renovation and maintainance.

Leroy Merlin marks out the rise of traffic and product sales in the beginning of 2015. 'Russian buyers spent their money for restyling products in November and December 2014, and continued to make restyling and buy the products in the first quarter of 2015' the representative of LM Mr. Muzho explains. The general manager of OBI in Russia Mr. Yan Strickland confirms that they see the traffic has fallen a bit, but the real expenses of the buyer have risen. In his opinion, this year the dynamics of consumption will change, but not so negative as experts predict. In the current situation, Leroy Merlin and OBI still save their plans to open new retail shops. Leroy Merlin have confirmed the start of 10 shops in 2015, and according to LM each shop investment is estimated at 1 bln rubles. OBI plan to open 18 retail shops during three years, investing €250 mln.

Top DIY chains Russia. 2015

Name

Income, bln rubles

Growth dynamics, %

Leroy Merlin

118,6

26,2

www.leroymerlin.ru

OBI

42,5

16,5

www.obi.ru

Castorama

25

10,6

www.castorama.ru

Петрович, Уровень

22,6

22,2

www.petrovichstd.ru

СатурнСтройМаркет

20

-9,1

www.saturn.net

Максидом

17,2

6,9

www.maxidom.ru

Метрика

14,6

10,1

www.metrika.ru

К-раута

12,7

10,5

www.k-rauta.ru

Строительный двор

12,6

6

www.sdvor.com

Бауцентр

12,2

19,7

www.baucenter.ru

Source: Infoline

The largest retail chain Leroy Merlin, that specializes in sales of building materials and home products, plans to speed up the growth in the Russian market and open 10 hypermarkets in Russia, which by 2019 will make up 120 shops total, reports CEO of LM in Russia Vincent Gentil to Interfax.

Currently Leroy Merlin opens their hypermarkets in the cities with population over 400,000 people, and the priority is cities with over million population. Now the retailer plans to open the hypermarkets in cities with population over 200,000 people. The space for these hypermarkets will be more compact, now it makes up 10,000 sq.m. each. In 2014 there were 6 hypermarkets opened, in 2015 - 10. Mr. Gentil says, that LM opens 20 shops per year and widen up to 120 hypermarkets by 2019. Mr.Gentil also marked out that they see high potential of the Russian market and plan to invest additional sources in it.

Mr. Gentil told that in 2014 LM income growth increased 30%. 'This year it is hard to say, I think probably over 20%. It depends on our development speed'. He also pointed out that in January there was tremendous demand in the market, because the consumers were eager to buy products for the old prices. Leroy Merlin had problems with suppliers, because they required to make the procurement prices higher because of devaluation of the ruble.

According to Mr. Gantil, in the first quarter of 2015 there was no decline of the demand in the hypermarkets. Despite economic crisis the comfort living is an important value for people. However now the consumers started to flow to economy price and middle price segments. Mr. Gantil says, that the Russian building materials market will be growing by the higher life level and willing to make renovations by themselves. ’The nearest ten years the potential of the Russian market let us open 500 hypermarkets with the area of 10,000 sq. m and the same number with the area of 5-6,000 sq. m.’

International company Leroy Merlin specializes in sales of building materials, design and decoration products for cottages, home and garden. The first hypermarket Leroy Merlin in Russia was opened in Mytyschi city in Moscow suburbs in 2004. Now the total number of hypermarkets is 35. In 2015 new hypermarkets is to be opened in Moscow, St.Petersburg, Chelyabinsk, Novokuznetsk, Kemerovo, Ufa, Novosibirsk, Penza, Tula. In future LM plans to open 20 shops per year.

If your company would like to contact Russian companies which supply to Leroy Merlin and other Russian DIY chains, the information could be available the registered users.

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