In 2002, when the Germans opened their first DIY store on the local market in Voluntari, near Bucharest, they saw net sales of EUR3.1 million in less than four months, that is EUR770,000 per month, 80% higher than the monthly average this year.
“In international business, the sales in the second quarter declined at a similar rate to that at the start of the year – in Romania and Bulgaria it reached double digits again. (…) Countries such as Greece and Romania were massively shaken by general economic and fiscal problems. As a result, private consumer spending – and with it demand for DIY products – diminished substantially. Moreover, there is no short-term improvement in sight,” reads the first half financial report of Praktiker.
Whereas when it first arrived Praktiker was only competing with Bricostore and the stores on the ground floor of communist apartment buildings, now there are four of five more companies on the market, such as Dedeman, BauMax, Hornbach and OBI.
Praktiker officials had not provided any additional details as to the steps taken to contain the decline by the time the story was ready for posting, considering 2011 looks like it will the company’s third year of decline and also its hardest.
Praktiker was the market leader for a number of years in terms of both number of stores and sales. It lost the top spot by sales to Bacau-based Dedeman in 2010, which embarked on a significant expansion process after the onset of the crisis.
The DIY market is set to become even more crowded this fall, when French-held Leroy Merlin, a giant on this segment in Europe, opens its first store in Bucharest, with clear intentions to expand to other areas over the years to come.