DIY And Gardening in France
Euromonitor International's DIY And Gardening in France market report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data, allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market - be they new product developments, packaging innovations, economic/lifestyle influences, distribution or pricing issues. Forecasts illustrate how the market is set to change.
Tables: 34 | Publication date: Oct 2009
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Executive summary
The first effects of the crisis after positive results in 2007
2007 was a good year for the DIY and gardening markets with total sales reaching EUR23.71 billion, a 6.6% rise against 2006. The growth was mainly driven by DIY sales, which confirmed the sector dynamism with a 7.5% increase. However, gardening sales also performed well after a difficult year in 2006 mainly due to a bad climate.
In 2008, the economic and housing crises had a negative impact on overall sales, which decreased by 0.9%. The most affected segment was DIY with a 1.1% decrease. The home improvement sector had benefitted from rising demand for new housing and more frequent home renewal in the review period and the slowdown of the housing market had some visible consequences on demand. Gardening sales remained flat; they are more dependent on climate variations than on the real economy.
Paint/home decorating and wall/floor/window coverings are best performing subsectors
The paint/home decorating and wall/floor/window coverings were the only two segments recording positive growth in 2008, with increases of 3.5% and 4.2% respectively. This positive performance can be explained by the passion of the French for home improvement and decoration. Many TV programmes such as “D&Co” on M6 channel have contributed to the increased demand and manufacturers and retailers have adapted their products to address new consumers’ needs. Moreover, the reduction of purchasing power has encouraged many households to carry home improvement activities themselves in order to save money.
Looking at product groups on a five-year trend, it is possible to see that all DIY subsectors recorded a high growth, particularly millwork, doors and windows, which benefitted from the dynamism of the housing market.
As far as gardening products are concerned, the categories that increased the most were barbecues and garden structures, driven by the trend towards a more integrated garden and the dynamism of outdoor equipment.
Eco-friendly products
Environmental and ecological issues now significantly influence purchasing behaviour; consumers gladly invest in eco-friendly products as long as they can be associated with short- or medium-term savings. As a result, manufacturers and retailers have started to incorporate the green agenda into their products.
This tendency is not expected to fade out soon since it is reflected in all aspects of society and not just in the DIY and gardening markets. This trend could be a good opportunity to boost sales in a complicated economic environment.
A very concentrated distribution
DIY distribution is increasingly concentrated in the hands of two main players (the Adeo and Kingfisher groups), in contrast with the growing number of manufacturing sources in the decoration and small equipment sub-segments.
In the gardening sector, specialised retailers have started to test new concepts and to diversify their products in order to reduce their dependency on horticultural goods and climatic variations.
Good prospects for 2013
2009 is going to be a difficult year for both DIY and gardening. The current economic recession is expected to affect households’ morale and consumption. However, the sectors under review may not be hit as hard as others due to their specificities. In fact, in times of economic uncertainty, people tend to centre on their home; since they cannot move, they tend to improve rather than move, which could benefit home improvement activities. Gardening sales are generally more dependent on climatic variations than on the real economy, however, the sector may also benefit from the need to get closer to nature and traditional values.
In 2013, DIY value sales are estimated to reach EUR19.68 billion. The housing market and economic climate are expected to improve from 2010 onwards; this new environment associated with favourable demographic factors will enable the home improvement sector to restart its growth.
The gardening market is more mature and is expected to remain relatively stable. Paint/home decorating, barbecues and outdoor equipment are expected to be the highest growth subsectors.
The effects of the economic and housing crises
Trend
French consumer confidence is deteriorating as the global financial crisis hits the economy. On 3rd October 2008, the government acknowledged that the country was in recession - two consecutive quarters of negative real GDP growth. Real GDP declined by 0.1% in Q308 and by 0.3% Q208. Yet the crisis is less severe than in Ireland, the UK or Spain, where consumer demand was more driven by debt. The decline is due to the weakness of the consumer market. In fact, household consumption expenditure fell by 0.1% in both the first and second quarters of 2008.
In the housing market, the main indicators are also deteriorating. In 2008, new housing sales decreased by 20.6%, accounting for a deficit of more than 100,000 new houses for the 2008-2009 period. Real estate agents also announced a diminution of 44% of their activity while construction companies reported a slowdown of -6% after ten years of continuous growth.
Current Impact
Slower housing sales, falling home values, tighter credit and the reduced availability of mortgages have curbed demand for big ticket renovations, which used to drive home improvement sales. In the meantime, high inflation rates and soaring energy prices have further crippled disposable incomes and boosted demand for energy efficiency.
As a result, the French DIY market started to decline in 2008 after several years of positive growth. According to the Bank of France statistics, value sales decreased by 1.1% while volumes fell by 3.6%. Gardening sales were also affected by the deteriorated economic environment and remained flat in 2008. The gardening sector is more dependent on climatic variations than on changes in the real economy.
Outlook
Western Europe is among the regions worst hit by the 2008 global financial crisis, with almost all major economies facing recession in 2008-2009. Unemployment, consumption and exports are set to deteriorate. Inflation is easing to the benefit of consumers as the world economy slows, yet the risk of deflation (a decrease in price levels) is a growing concern. A positive sign has been governments' ability to coordinate monetary and fiscal policies in response to the crisis, despite the region's political and economic diversity. Western Europe is expected to return to growth in 2010. For the short-term period, the European Commission forecasts a real GDP growth of -1.8% in 2009 and -0.4% in 2010 in France.
Economists and professionals do not expect to see any improvements to the housing sector before the end of 2010 and they are asking the government to take measures such reducing the VAT to 5.5% in an effort to boost sales.
Future Impact
In 2009, manufacturers and retailers will increasingly experience the full impact of the downturn in the French economy and housing market. The effects of the “credit crunch” are likely to result in lower sales growth for the DIY market. The sector will suffer from decreasing demand of new housing and big-ticket renovations.
However, the decrease of DIY sales is expected to be limited in 2009 to -0.4% and the market is forecast return to growth from 2010 onwards due to a number of positive factors. The DIY market seems to be well-equipped to adapt to future challenges. Firstly, in times of economic upheaval and anxiety people often retreat into a home-centred lifestyle. This trend, which involves equipping the home with gadgets and touches of indulgence, is likely to intensify. "As we fret about what is happening in the wider world, people's natural instinct is to cocoon themselves away," says designer and trend spotter Mark Garside. "Homely details [inspired by the natural world] are creeping into every aspect of design.” The new do-it-at-home culture will thrive. The lack of activity in the housing market should therefore offer some short-term impetus for DIY purchases as housekeepers seek to “improve, rather than move”.
Moreover, the increasing concern about environmental issues will certainly drive demand for energy-efficient projects. A number of home improvement projects also qualify for tax credits, such as new windows, doors, insulation and roofing, which could to a certain extent, drive demand. Finally, the DIY industry remains reasonably cash rich and the underlying foundation for the industry is one of reasonable health.
A market still supported by favourable socio-demographic factors
Trend
The socio-economic background remains globally favourable and follows the trends observed in previous years. Firstly, the increase of free time enables the French to spend more time at home. Secondly, the evolution of the family structure (increase of births, high rates of divorces and single parent families) keeps pushing the global home improvement market. Moreover, the access to TV screens for the brands combined with the myriad of magazines and TV programmes on this theme are still an important driving force behind the sector.
Current Impact
There has been a growing interest in decorating, from DIY and gardening to interior design in France in recent years. French people continue to convert their houses and DIY activities, in all its forms, remains popular. In parallel, gardening is also becoming increasingly popular and expanding its scope to a wider public of “intermediate” gardeners. Gardens are gradually converting into another room in the house, a place where consumers can enjoy spending time with family or friends.
In 2008, 82% of the French population practiced DIY, an increase from 66% in 2002. 750 million people visit DIY retailers each year representing an increase of 20% over the past 10 years. The gardening sector also has good potential with six French people out of ten having a garden. According to Francoscopie 2007, 13 million homes have a garden and 60% of these buy plants for a terrace or balcony. The average spending per capita reached EUR712 in DIY and EUR232 in gardening.
For 89% of the people interviewed by Cetelem, the house still remains at the centre of their positive preoccupations (time sharing with family and friends) and DIY still remains the leading equipment sector, ahead of televisions, hifis and furniture.
Outlook
Even if the government manages to change some aspects of the 35-hour working week law, the French will still have more holidays and free time than the rest of Europe.
In terms of demographics, France can expect a modest but steady increase in the number of children and teenagers through 2020 as well as a significant increase in the number of “older middle-agers” and elderly. With a total fertility rate of 2.02 (in 2008), France is the most fertile country in the European Union after Ireland. Both these demographic shifts will have an impact on national patterns of consumption and spending on home renovation and improvement is expected to rise. In parallel, the divorces rates and single-parent families are expected to keep rising.
Future impact
In the short term, during 2009 the housing and economic crises are expected to affect DIY sales, which tend to be linked with the real economy. Gardening sales are more dependent on climatic variations but they may also be affected by the decrease in households’ consumption expenditure.
However, in the medium term, it is predicted that sales will continue to grow since most of the socio-demographic trends listed above will still be valid.
There will also be a positive impact of demographics. The baby boomer offspring, the "Echo Boomers," should be hitting their peak for housing demand and remodelling in the next years. Coupled with a rebounding economy, these demographics point to a surge in the home improvement industry.
According to a Cetelem Observer survey, the 2010 Euroconsumer profile will be as follows: older, with a higher income, a heavy buyer of electronic goods and housing equipment. In the next three years, growth will be important in the following sectors: household appliances (17%), furniture (17%) and home improvement (10%).
Eco-friendly environment
Trend
French are increasingly interested in environmental and ecological issues. In 2006, 93% of French people aged 20 years or older declared that they cared about environmental issues (source: Gifam/Sofres study). However, only 9% of the French were ready to pay more for eco-friendly products (below the European average of 17%) and 44% rarely bought eco-friendly products (Boston Consulting group/European study).
The situation has slightly changed since then. Consumers are now gladly investing in eco-friendly products as long as they can be associated with short- or medium-term financial savings. The “good for the planet” argument is not enough in itself to change buying habits. In a context of rising energy costs, equipment that enables the reduction consumption is seen as essential.
Current impact
In this respect, DIY retailers and manufacturers are in the first line with products such as double-glazing, heating and sanitary water equipment, photovoltaics units, rain water recycling, and windmills. The eco-friendly products’ universe is increasing and diversifying itself. Professionals from the sector are rallying to inform and encourage consumers and make the offer more accessible by extended product offers, sales training and increased consumer advice.
Gardeners are also very concerned about the environment. According to a survey by UPJ (Union des enterprises pour la Protection des Jardins), 84% said they took actions to preserve the environment and 72% limited the use of chemical products. As a result, all major brands are developing products ranges compatible with organic agriculture, including Carré Vert for KB, Activasol for Algoflash, Natursol for Sem and Naturen for Fertiligène. They all emphasise the natural characteristics of their products and use it as a sales argument.
Outlook
This trend is not expected to fade soon; it is reflected in all sectors of the economy and not just the DIY and gardening. Actions will be taken at all levels of society to promote a greener planet. The tendency is towards changes in behaviour.
As a consequence, the demand for eco-friendly products is expected to keep growing. Having realised the danger to the planet from global warming, French politicians and citizens will continue working to build green and sustainable living spaces. From ecologically-friendly homes to ‘eco-neighbourhoods’, France is planned to go greener in the future.
Future Impact
In 2009, green products could represent an opportunity for both manufacturers and retailers to maintain sales in a complicated economic environment. In a context of rising energy costs, fitting equipment that enables the reduction of consumption is seen as essential and sales of such products will rise in the future. An increase in sales of eco-friendly garden products is also expected since fertilizers and chemical product have a very bad image.
In the long term (2010 to 2013), a substantial growth could come from green homes, however, the increased product range will mainly depend on the prices of products and the fiscal incentives granted by governments.
A home becomes green through its choices of energy for heating or electricity (heat pumps, wind, thermal or solar power), its means of controlling of water consumption (low flow systems, use of rainwater), and the materials it uses, such as wood for interior walls and hemp as insulation. The cost of owning a green home is currently high. The organic part of the construction, which requires costly materials, offers little monetary return on investment while construction costs are 30% higher. The passive energy consumption aspect, however, is a cost-saver. It saves the home-owner the cost of a heating system, usually among the most significant expenses of a traditional home, but the return on investment is usually long, between five to 10 years, which currently deters people from investing.
Increased diversification through service
Trend
In order to generate sales in the DIY and gardening sectors, it is necessary to accompany the potential customer in the whole purchase process by giving ideas, creating the need, explaining how to proceed and simplifying the use of tools.
The DIY market became stable in 2008. French consumers have understood the main differences between existing channels. According to their project, budget, time available and need for advice, they will go to the most suitable store format (DIY multiples for advice and ideas, wholesalers for building materials and discount stores for price).
Current Impact
DIY multiples competitive strength therefore lies in the service they provide. They are increasingly conscious about this fact and have increased their efforts to provide wide ranges of services to potential DIY consumers. A basic component of service is choice. DIY retailers offer a large choice with an average of 60,000 products per store; they also keep products in stock for long periods (sometimes for several months).
In order to attract the rising population of intermediate DIY consumers, which will increasingly include women, they provide more teaching materials and security advice through highly-trained sales advisors, innovative websites, training sessions and point-of-sale material.
Outlook
The leading brands are making efforts to increase their notoriety and brand awareness. They are starting to advertise on television, usually by promoting the good service they provide. For example, Mr Bricolage focused its last advertising film on the relationship of trust between advisors and consumers.
There is a trend towards personalised service and tailor-made advice. Retailers are expected to personalise service according to their target. Castorama has already begun this process by recently appointing dedicated consultants for women, called “Madame Casto”, in its stores. It is also making increasing efforts to work on tailor-made projects and to create synergies between various sales channels to keep customers loyal. Retailer Lapeyre has successfully implemented this system; internet consumers are guided through every stage of their project until they place their order on the website or they can decide to refine their project at one of the Lapeyre stores. Sales people have access to customer projects that originated on the website, along with greater technical details. The result is a clearer view of customer requirements, a more personalised follow-up and more loyal customers.
Future impact
The future of DIY is moving towards highly technological or integrated projects where the need for information and assistance will be high.
The home automation market will experience high growth in the coming period and customers will require more technical advice on this field. Home automation (also called smart homes or domotics) is a field within building automation, specialising in the specific automation requirements of private homes and in the application of automation techniques for the comfort and security of its residents.
It is expected that there will be a high growth in eco-construction and the need for guidance in this area will be especially high in the future. Women are particularly interested in eco-construction and they consistently ask for more information on the following areas: health (72%), savings realised (60%) and the additional comfort (48%) (source Castorama).
Professionals in the sector will tend to start from consumers’ needs and projects, for example insulate the house, install a home cinema or build a kitchen, and act as “consultants”. By personalising and improving customer service, retailers can maximise customer satisfaction and gain consumer loyalty, which will in turn result in higher profits.
Continued trend towards the feminisation of the market
Trend
Women participating in DIY are the fastest growing segment of the home improvement marketplace. This trend has been influenced by the growing independence of women, changing demographics, the increase of free time with the 35 hour-week and the proliferation of television shows and magazines on the sector.
While women have always played a role in remodelling choices and room design, what has shifted is that women are now taking on projects and doing them themselves.
Current Impact
Manufacturers are now targeting this active group of women with products that are reasonably simple to operate, ergonomically designed, efficient and practical for women to use. They are also providing additional services, such as Black & Decker’s dedicated website containing tips and material presentation.
Home improvement centres are becoming better at meeting women's needs. The largest retailers have taken steps to make their stores more female-friendly and implemented a number of ‘how-to’ workshops for both men and women.
The leading French DIY retailer, Castorama, has established a female tool section, which assesses whether products are suitable for use by women. Those accepted receive an award. The 30 products accepted out of 90 reviewed are presented in the store as Casto pour Elles, under a recognisable sign. Castorama has now gone further and has decided to appoint a consultant, Madame Casto, in each of its 107 French stores, to advise on tools and DIY requirements.
Leroy Merlin, is aiming to offer practical and light products designed for the women, whether they are an experienced DIY exponent or not. The product displays are backed by advice and guidelines.
Bricomarché, the third largest DIY chain in France, has five specialty sections which target decoration, DIY, materials, gardening and pets. The chain has launched a new concept, which it calls singularisation - aimed at attracting women individually or in groups to become knowledgeable in decoration, wallpaper hanging and lighting, among other personalised skills.
Outlook
The trend is not expected to cease anytime soon because the market is feeding itself. The proliferation of “shelter” magazines such as “Du côté de chez vous”, “Questions maisons”, Téva Déco”, “Intérieurs”, “Ma maison, mes projets” clearly target women and expose them to remodelling and decorating ideas.
Furthermore, there are more women in the market willing to spend money, which will have a positive demographic effect. On the one hand, women are living longer than men and they are more active in their senior years. On the other hand, young women are marrying later and buying their own home in their early working years.
Future Impact
The women segment is estimated to make up one third of the DIY market and it could reach up to 40% in the coming years.
Both manufacturers and retailers will continue their efforts to target this promising segment by developing new products specially designed for women and by offering an increasing range of tailored services.
We can anticipate the proliferation of dedicated internet sites, forums, magazines or TV shows. We can cite the example of the American site www.be-jane.com where women can view contents such as animated how-to tutorials, a power-tool glossary and step-by-step DIY projects. It also includes an online store, a weblog for women to post their experiences with their own projects and a referral system for female contractors.
Females ‘DIYers’ are also more concerned about environmental issues. The eco-friendly criterion is a decisive driver in their purchase decision in 84% of cases. In the current difficult economic context, these new segments could represent important growth opportunities.
Table of contents
DIY AND GARDENING IN FRANCE : MARKET INSIGHT
EXECUTIVE SUMMARY
The first effects of the crisis after positive results in 2007
Paint/home decorating and wall/floor/window coverings are best performing subsectors
Eco-friendly products
A very concentrated distribution
Good prospects for 2013
The effects of the economic and housing crises
A market still supported by favourable socio-demographic factors
Eco-friendly environment
Increased diversification through service
Continued trend towards the feminisation of the market
MARKET DATA
Table 1 Sales of DIY and Gardening by Sector: Value 2003-2008
Table 2 Sales of DIY and Gardening by Sector: % Value Growth 2003-2008
Table 3 DIY and Gardening Company Shares 2004-2008
Table 4 DIY and Gardening Brand Shares 2005-2008
Table 5 Sales of DIY and Gardening by Distribution Format: % Analysis 2003-2008
Table 6 Forecast Sales of DIY and Gardening by Sector: Value 2008-2013
Table 7 Forecast Sales of DIY and Gardening by Sector: % Value Growth 2008-2013
DEFINITIONS
DIY and gardening
DIY
Building materials
Hardware
Electrical supplies
Hand tools and accessories
Power tools and accessories
Paint/home decorating
Wall/floor/window coverings
Plumbing/heating/cooling
Millwork/doors/windows
Kitchen and bath products
Other DIY
Gardening
Horticultural goods
Garden structures
Gardening equipment
Garden care
Other gardening
Barbecues
Summary 1 Research Sources
LOCAL COMPANY PROFILES - FRANCE
BRICO DéPôT SAS - DIY AND GARDENING - FRANCE
STRATEGIC DIRECTION
KEY FACTS
Summary 2 Brico Dépôt SAS: Key Facts
Summary 3 Brico Dépôt SAS: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
GAMM VERT SA - DIY AND GARDENING - FRANCE
STRATEGIC DIRECTION
KEY FACTS
Summary 4 Gamm Vert SA: Key Facts
Summary 5 Gamm Vert SA: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
LAPEYRE, GROUPE - DIY AND GARDENING - FRANCE
STRATEGIC DIRECTION
KEY FACTS
Summary 6 Lapeyre, Groupe SA: Key Facts
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
LEGRAND SA - DIY AND GARDENING - FRANCE
STRATEGIC DIRECTION
KEY FACTS
Summary 7 Legrand SA: Key Facts
Summary 8 Legrand SA: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 9 Legrand SA: Competitive Position 2008
MR BRICOLAGE SA - DIY AND GARDENING - FRANCE
STRATEGIC DIRECTION
KEY FACTS
Summary 10 Mr Bricolage SA: Key Facts
Summary 11 Mr Bricolage SA: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
DIY IN FRANCE
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
New Product Developments
Summary 12 New Product Launches 2007- 2008
SECTOR DATA
Table 8 Sales of DIY by Subsector: Value 2003-2008
Table 9 Sales of DIY by Subsector: % Value Growth 2003-2008
Table 10 DIY Company Shares 2004-2008
Table 11 DIY Brand Shares 2005-2008
Table 12 Sales of DIY by Distribution Format: % Analysis 2003-2008
Table 13 Forecast Sales of DIY by Subsector: Value 2008-2013
Table 14 Forecast Sales of DIY by Subsector: % Value Growth 2008-2013
GARDENING IN FRANCE
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
New Product Developments
Summary 13 New Product Launches 2007- 2008
SECTOR DATA
Table 15 Sales of Gardening by Subsector: Value 2003-2008
Table 16 Sales of Gardening by Subsector: % Value Growth 2003-2008
Table 17 Gardening Company Shares 2004-2008
Table 18 Gardening Brand Shares 2005-2008
Table 19 Sales of Gardening by Distribution Format: % Analysis 2003-2008
Table 20 Forecast Sales of Gardening by Subsector: Value 2008-2013
Table 21 Forecast Sales of Gardening by Subsector: % Value Growth 2008-2013