DIY retailers, more delays than openings this year

Half of DIY retailers' expansion projects have remained on paper this year as the market has contracted by as much as 25%.

DIY retailers, which have experienced falling demand for the first time this year, have adjusted their short-term expansion plans to preserve their cash. Only 11 of the 23 new stores announced initially were opened this year, in the wake of total investments worth 107m euros.

However, these retailers are late to resort to store network resizing, a move several food retailers have made this year.

"Shrinking consumption, constructions market turmoil and the real estate freeze have led, for the first time since this trade segment emerged in Romania, to a market decline that could top 25% overall in 2009," explained Monica Hodor, interim general manager of Praktiker Romania, the biggest player on the market.

She also specified the reassessment of new investment projects was a strategy retailers use to protect their cash reserves and it may allow companies to resume expansion after the economy rebounds.

"(...) Increases are now coming only from the home décor segment and gardening," stated Alexander Frech, general manager of BauMax Romania.

Praktiker has significantly slowed down expansion this year on all the markets it operates on. French Bricostore has also adjusted plans this year. Both Praktiker, and Bricostore have this year added smaller stores than the network average.

In turn, Mr. Bricolage, the French network operated domestically through a franchise by the owner of Arabesque, Cezar Ropotan, has opened its first small store this year.

Dedeman Romanian company, owned by Adrian and Dragos Paval brothers of Bacau, has this year surprised the market with its expansion pace: the network has entered Bucharest and finalised all the four new projects announced in early 2009, following 25m-euro investments.

The newest retailer on the market, Obi, will end 2009 with four operational stores, from the 11 it had previously announced.