Sales collapse: it gets more expensive in hardware stores

Sales collapse
It gets more expensive in hardware stores

The Corona year 2020 brought record sales to the hardware stores. But now sales are collapsing – and now there is also a threat of a wave of price increases.

The DIY stores in Germany were among the winners of the crisis in the Corona year 2020. Because many German citizens use the pandemic to beautify their own four walls or the garden. But now there is a threat of price increases for many products. “We will certainly not be able to avoid taking price measures,” said the general manager of the trade association for DIY, building and gardening (BHB), Peter Wüst. Suppliers have announced price increases across the board. According to BHB, wood and building materials are affected as well as imported products from East Asia, which are affected by increased logistics costs.

In any case, the good run that the DIY megastores with garden centers recently had seems to be interrupted at the moment. As a result of the current lockdown, sales collapsed by around 50 percent in the first quarter, reported Wüst. A decline in sales throughout 2021 thus seems inevitable. The problem: While DIY stores were largely allowed to remain open during the first lockdown, they are currently no longer considered to be systemically relevant. This means that they are subject to the same restrictions as, for example, the fashion trade.

“Politics in Germany is currently taking stupid and ignorant positions,” the “Welt” quotes the BHB boss. Governments around the world have understood how important construction markets are. In Germany, however, they have to remain closed. “Our industry supplies people with the necessary repair supplies and with millions of products for home, garden and leisure,” said Wüst. “This allows consumers to feel comfortable at home. Then they endure the lockdown more easily and really stay in their own walls and gardens.”

The Corona year 2020 had given the do-it-yourself industry previously unknown growth rates. Sales rose by around 14 percent to a good 22 billion euros. In the pandemic, everything was needed that could help to make the forced stay in your own four walls more pleasant and to prettify your own garden. Above all, paints and painting accessories as well as garden equipment sold better than ever before.

Not only the home office has been upgraded, emphasized the spokesman for the BHB board and Obi managing director Peter Tepaß. Many would have built their own gym or private spa at home in Lockdown and installed outdoor kitchens in the garden. There was no shortage of money. After all, many trips and visits to restaurants had to be canceled.

Shovels instead of guns

“In America, at the beginning of the pandemic, people bought weapons. In Germany, hardware stores were equipped with shovels and hammers in order to have the feeling of being able to counter the crisis,” explained psychologist Stephan Grünewald from the Rheingold Institute in Cologne the development. The institute, which tries to fathom the mood in the population with deep psychological interviews, had investigated the importance of DIY and gardening in Corona times on behalf of the BHB.

At the beginning of the pandemic year 2021, Germany was “increasingly marked by attrition, aggressiveness and hopelessness,” said the psychologist. “Most people can only endure the idle life in lockdown by taking action.” With hammers, screws and materials from the hardware store, the apartment and garden would be converted into a stronghold against the pandemic. He therefore recommended that the hardware stores be reopened as soon as possible.

Last year, the first lockdown brought fantastic growth rates to the DIY stores that were still open at the time. In April 2020, sales were more than 20 percent above the previous year’s level, in May it was even more than 30 percent. Even in the summer, which is usually rather weak in demand, sales were significantly higher than in other years due to the limited travel options.

The industry was also affected by the e-commerce boom. Online sales of goods from the DIY store ranges rose in 2020 by 26.5 percent to just under 5 billion euros. Here, however, pure online providers such as Amazon or Manomano secured the lion’s share of the business. They had a market share of 50.6 percent, the construction and home improvement stores with their online offers only 23.7 percent. But the stationary retailers in 2020 grew faster with their online offers for the first time than the pure Internet providers, explained the BHB.

Even if 2021 is likely to be a mixed year for the DIY stores, the industry is looking to the future with optimism. Do-it-yourself has become a matter of course again for many people during the crisis, said Wüst. The industry is therefore hoping for more encouraging figures for 2022.