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Sector Study: Domestic retail market of Home Goods
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Athens, October 11th, 2010


Slowdown in the domestic retail market of home goods chains in 2008-2009.

  • The sales of home goods store chains fell at an average rate of 6.4% per annum over the two-year period 2008-2009.
  • 13 chains accounted for approximately 75% of the overall market in 2009.
  • Several companies operating home goods store chains have also expanded their network by adopting the franchising business model.

The sector's key attribute is the co-existence of a great number of home goods stores, often at a short distance from one another, resulting in tight competition among sector companies, all of which are after a higher market share. Another factor that reinforces competition is the abundance of other types of stores that sell home goods (individual stores, supermarkets, department stores, etc.).
These findings are featured in the “Home Goods Store Chains” sector study which was recently carried out by the Department of Economic Research of the ICAP Group.
Pricing policies, client service, quality and range of goods, brand recognition and advertising, are some of the means that chains use to tackle competition.

Another very effective was of promoting sales are gift registries, which several home goods chains now offer in their stores.

The total market size (sales) generated by home goods chains (with at least 3 stores operating under the same brand) enjoyed a rise between 1999 and 2007, with a 13.6% average rate of change per annum. However, the current economic situation which has reduced the consumers' available income has seriously affected this market over the past two years (2008-2009), which has contracted by 6.4% in annual average terms. In 2009 in particular, the value of the retail market of home goods chains value fell 8.6% from 2008.
In the home goods sector, most companies have chosen to develop their networks through franchising. 64.4% of the stores of 24 chains (that are presented in the study) are franchise stores, whereas 35.6% are corporate stores. 51% of these chain stores are gathered in Attica and 8% in Thessalonica.

The study includes a financial analysis of home goods retailers based on selected ratios. Moreover, a consolidated balance sheet of a representative sample of 11 companies was drawn up. The figures show that the total assets of these companies fell 2.8% in 2008. Their sales also dropped that year, by 3.2%. Gross profit increased by 3.3% in 2008. However, the increase of other operating expenses by 7.51% made the operating margin decline by 2.4%. Therefore, their profit before income tax fell 31.1% in 2008. Companies posted a 12.2% drop in their EBITDA.


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