Home Improvement Growth Expectations – reflecting on the first half of 2021
Last year the home improvement industry saw a “mini-boom” throughout the world. Even in countries that forced store closures, the industry saw high growth when stores were allowed to reopen, and even more so in countries that categorised DIY retailing as essential. This was spurred on by orders to stay at home, lack of international travel and closure of leisure activities like restaurants, gyms and theatres.
What is the current situation of the home improvement sector?
There were a variety of theories as to what would happen in 2021 with some predicting the sector would see a drop in sales following an extraordinary 2020. Now that Q2 and half year reports are being released, what trends can we highlight?
How is the year 2021 shaping up for the home improvement sector?
From the first half of 2021 sales in the home improvement sector have shown a good growth in comparison to 2019 as a base year, and in even some cases in comparison to 2020. For example, Kingfisher’s Q2 trading update for 2021 highlighted “high levels of demand from both new and existing customers continue” Further to this, The Home Depot, the world’s largest home improvement retailer, just recently reported sales of US$41.1 billion for the second quarter of fiscal 2021, an increase of US$3.1 billion, or 8.1% from the second quarter of fiscal 2020.
Moreover, and importantly, it is not only the retailers who are posting record sales. Einhell Germany AG, the manufacturer of power tools and electrical garden equipment, generated sales of EUR 463.4 million from January to June 2021, compared to EUR 341.6 million in the same period in the previous year.
The above is summarised succinctly with data from Nationwide in the UK. The building society analysed millions of their customers’ transactions from April to June 2021 and found that non-essential spending on DIY retail has seen a 28% increase in Q1 of 2021.
However, not all countries have seen growth in 2021. The industry association for DACH countries, the BHB, recently stated that in Germany the industry has seen a decrease in sales in the first half of the year, impacted by store closures for the first few months of the year and a particularly cold and wet summer season.
Ultimately, it is hard to determine what the future for the home improvement industry will hold. Overall, we are seeing positive growth in most countries, which is a encouraging sign for the industry. New customers have picked up DIY, some for the first time, and others have fallen back in love with it.
Which sector has grown the most?
Gardening in particular is a trend that some papers and journalists are reporting is here to stay. This growing trend is very noticeable in the United States , however, other articles highlight that the growth in gardening sales is not limited to the USA, but the UK and European countries have shown a “rise in trend toward landscaping, farming and home gardening” .
Perhaps the sustained increase in interest of green matters and sustainability is an attributing factor to this trend. Additionally, with some countries around the world experiencing food supply challenges some people have turned to growing their own fruit and vegetables. Alongside this, the younger public continue to demonstrate a keen interest in indoor gardening and green life.
Reasons for the growth of the home improvement sector
One of the predominant causes for these record sales is that work culture has seen a dramatic shift and evolution with an increase in teleworking. People are either demanding that they are given the possibility to work from home or companies continue to enforce this. Working from home results in an increase in time spent at home, and as people spend more time at home, they actively partake in household transformation to build spaces that suit them and that they enjoy.
Overall, we have seen increase interest in do-it-yourself resulting in the continuing record sales we are seeing in many countries. With new trends and new generations moving into apartments and homes, we are likely to continue to see steady growth in the DIY Industry, as long as the industry runs with the initiative, defines their target audience, and promotes the retail trade. Being prepared to adapt with flexibility and focus and ensure we are in the best position to work successfully in the new retail landscape will ensure that we are in the best position in the uncertain future.