Sunday Times

Leroy Mer­lin set to shake up lo­cal DIY mar­ket

- By PALESA VUYOLWETHU TSHANDU Business · Retail · Shopping · Consumer Goods · Industries · Leroy Merlin · Johannesburg · Austria · Iceland · Woolworths · Belgium · France · France national football team · Spain · Spain national football team · Portugal · Portugal national football team · Poland · Poland national football team · Romania · Russia · Russian Empire · Kazakhstan · Brazil · China · Belarus · Cédric Soares · Massmart Holdings Ltd.

● The world’s third-largest home im­prove­ment re­tailer, French-based Adeo Group, opened a 17,000m² DIY store, Leroy Mer­lin, in Eden­vale in Jo­han­nes­burg on Fri­day and has plans to ex­pand with smaller stores in shop­ping malls.

Cé­dric Sen­nepin, coun­try leader for Leroy Mer­lin in SA, said: “We are work­ing on try­ing to find a con­cept that we can adapt on a smaller scale so [that] we can pro­pose some­thing that can fit into malls in dif­fer­ent places in SA.”

Sen­nepin said the Leroy Mer­lin pop-up store at the Stoner­idge Cen­tre in Eden­vale would give the com­pany “the ca­pac­ity to learn and make mis­takes on a small scale to pre­pare for the big store.

“It gives us the will­ing­ness and con­fi­dence to go into smaller con­cept stores … but for the mo­ment we are work­ing on big­ger­for­mat stores.”

The com­pany is al­ready plan­ning to open two more stores in Gaut­eng in the next year.

Leroy Mer­lin will com­pete with Mass­mart’s Builders Ware­house and Builders Ex­press, among other home im­prove­ment re­tail brands.

When Mass­mart’s Mass­build de­vel­oped Builders Ex­press as a smaller for­mat of Builders Ware­house, the smaller stores were lo­cated within the same catch­ment area as the Builders Ware­house stores.

“Even with Pick n Pay and Wool­worths, you can find any of their smaller stores 2km or 5km apart.

But our catch­ment ar­eas need to be within 30km in order for us to be able to sur­vive as Leroy Mer­lin stores are very large,” said.

Mass­build has 110 stores across the con­ti­nent, with net trad­ing space of 461,710m² as of De­cem­ber 2017.

Leroy Mer­lin has stores in 14 coun­tries in­clud­ing France, Spain, Por­tu­gal, Poland, Ro­ma­nia, Rus­sia, Kaza­khstan, Brazil and China. Sen­nepin

But it is set­ting up shop in SA at a time when con­sumer spend­ing has slowed.

Ac­cord­ing to Stats SA, re­tail trade sales in July in­creased by 1.3% year on year.

De­spite this, Sen­nepin re­mains con­fi­dent the re­tailer will be able to win over the South African con­sumer.

“Our strat­egy is to con­vert the tra­di­tional re­tail in­dus­try into the new age of dig­i­tal, but our phi­los­o­phy is not to be­come a dig­i­tal com­pany,” he said.

Leroy Mer­lin will have an on­line store. “It’s to com­bine the best of the dif­fer­ent chan­nels, leav­ing the op­por­tu­nity to our cus­tomers to start their shop­ping or their re­la­tion­ship with the brand at home on their couch,” Sen­nepin said.

On whether the com­pany could com­pete with Mass­mart, Sen­nepin said: “We are not per­fect, we will do mis­takes, but we will not be more ex­pen­sive than our com­peti­tors.”

An an­a­lyst, who did not want to be named, said Leroy Mer­lin was ex­pected to com­pete ag­gres­sively in the Builders Ware­house for­mat, “but I’m not sure what their small-for­mat stores are go­ing to look like. If you look at Builders, they are still do­ing well in their big-box for­mat stores.

“Out of their Mass­mart fold, they are the ones per­form­ing the best in terms of their dif­fer­ent seg­ments. We will need to see how it plays out in the next cou­ple of months.”

Our strat­egy is to con­vert the tra­di­tional re­tail in­dus­try into the new age of dig­i­tal

 ??  ?? Leroy Mer­lin, a French re­tail brand, opened its first store in SA this week. The 17,000m² store is in Eden­vale, in Gaut­eng.
Leroy Mer­lin, a French re­tail brand, opened its first store in SA this week. The 17,000m² store is in Eden­vale, in Gaut­eng.
 ??  ??

Newspapers in English

Newspapers from South Africa