Do It Yourself Reinforcing Limitation

Brico Depot, the DIY store brand where the Kingfisher chain operates in the Iberian Peninsula, plans to expand, despite having an 18-year history in Spain and accounting for only 3% of its parent company’s global results. The goal is to double the number of organizations that have benefited from the explosion of anger at the home abandoned by the coronavirus pandemic and months of forced seclusion. “The potential of the Spanish market is huge and we don’t use it as an industry,” says Michael Foulds, CEO of the British giant’s Spanish subsidiary.

After 2021, when the company saw a 23% increase in sales (up to 428 million euros) and a 240% profit (up to 14.6 million euros in total), Brico Depot is looking to bet again on “this region”. “There is less do-it-yourself supply in Spain than in countries like France, Germany or the United Kingdom, and yet more owners living in their own homes,” Foulds explains, adding that Spain also owns homes. “They are between 40 and 45 years old on average and need investment and certain care from their owners.

Brico Depot currently has 31 operations in the Iberian Peninsula and the goal is to at least double that figure, with some stores “especially” in the cities of Madrid, Barcelona and Lisbon, but also in smaller cities between 5,000 and 6,000 square metres. In fact, they do not exclude the “future” of making agreements with companies such as “Cepsa or Repsol” in order to have “corners” in these service stations or supermarkets in order to be able to deliver products to customers.

However, the momentum of the online channel is growing, and 60% of the purchases made by his customers already exist, as he admits, “an online-offline journey and vice versa.” Two years ago, this rate was 40%. “At peak times we already reach 10% of total sales,” he adds. The company also plans to increase sales to professionals, who make up 25% of the total, the rest are people with “a certain level of knowledge,” as it explains. To do this, they have launched a loyalty program under the name Scan & Collect that allows their users to get their billing history or delivery service within three days and technical service within 30 minutes. “We’re investing energy in this 25%,” he says.

Despite the spiral of inflation due to the war in Ukraine, they do not foresee an increase in prices. “Our strategy is to always guarantee the most competitive prices. Not only does this confirm that we have the most competitive prices in each market, we also offer our customers a minimum price guarantee, and if for any reason they find a cheaper product than the competition, we’ll double the difference back.” , explains.

However, he acknowledges that there is a shortage of supplies for some products. “The current context is complex due to raw material shortages and procurement challenges in Europe, but we see this more as an opportunity as our customers are increasingly looking for value,” he explains. This is the case of wood, a product where they had an uptake problem due to the war but was resolved. “We have stopped selling products from these two regions (Russia and Ukraine) and are looking for other sources, other origins and other countries to buy products. In the case of wood, we’ve figured it out even though it’s been complicated for a few months,” he says.

“The idea of ​​investing in the home, spending more time became more apparent after the closure,” admits Foulds, who doesn’t believe this trend will decline mainly for two reasons: The interest in DIY is for millennials, the 18- to 29-year-olds and consumers. interest in reducing their impact on the environment.

“60% of our customers are actively aiming to reduce their energy consumption compared to electricity or fuel costs,” says Mike. According to the figures, 10% of Kingfisher’s sales come from products that reduce energy and/or water consumption. Examples of top-selling items include more efficient air conditioners or windows that reduce heat and cold transfer to better maintain indoor temperatures, while space is solar panels for self-consumption. “We’ve sold them in the past and it’s something we’re working on now,” he adds.

Source: Informacion


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