Home and Garden Specialist Retailers in Argentina

PROSPECTS

Large presence of neighbourhood stores continues to dilute sales

Home and garden specialist retailers is a highly fragmented channel in Argentina. While there are important chains, the vast majority of businesses are stores located in neighbourhoods which only have one outlet.

Smaller players struggling to survive ongoing recession

Given the ongoing recession in Argentina, many consumers are not thinking about refurbishing their homes, with sales in this segment thus being strongly impacted by the economic crisis and many smaller businesses being forced to close. On the other hand, providers of more simple home and garden items such as paint shops are benefiting from the fact that consumers are prioritising cheaper repairs in order to optimise their home improvement budgets.

Stagnating real estate market to continue to limit demand

Prospects for home and garden specialist retailers remain bleak given the stagnating real estate market in Argentina. The recent appreciation of the US dollar against the local currency has resulted in a sharp slowdown in home purchases and therefore demand for home and garden products.

COMPETITIVE LANDSCAPE

Easy leverages expansive store network to remain in pole position

With 44 stores distributed throughout the country, Easy leads home and garden specialist retailers sales. In recent years, the company has also managed to significantly boost sales via its online channel and offering of constant promotions in different segments.

Paint shop players leverage franchise model to extend outreach

A very successful model that allows for strong expansion in a very short period of time is franchising, with this strategy proving to be particularly successful in the paint shops channel. The franchisee to some extent buys a business that already works successfully, while the franchisor can achieve rapid expansion with very low investment.

Leading players invest in widespread discounting to attract consumers

As a result of the challenging economic environment, large paint shop chains such as Pinturerías Rex and Pinturerías del Centro permanently offer promotions with a number of different banks to attract consumers and avoid a bigger fall in sales. For example, Sodimac recently launched an unusual campaign with the aim of boosting sales called “Opportunity Hounds”.

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