Investing in the DIY boom: DIY stores are a happy place for hobbyists and shareholders

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Craftsmen are becoming more expensive, which is why many citizens around the world turn to hammers and pliers. DIY is a trend; Of course, hardware stores and their shareholders also benefit from this.

DIY is on the rise: many people around the world are increasingly turning to the original. You repair it yourself and save costs. Even if many things are not as clear or precise, they are all homemade and only cost a fraction of what a handmade invoice would cost.

A look at YouTube reveals how big the boom really is. DiY's selection of short videos is gigantic. She explains hundreds of times how to repair, assemble or build something yourself, without the need for a professional craftsman. The diversity is gigantic. From simple minor repairs, such as fixing stains on walls and furniture, to building entire houses – DIY hearts, what more could you ask for?

About the expert

Markus Zschaber is the founder of VMZ Vermögensverwaltungsgesellschaft in Cologne

It remains to be seen if this will always be the case. In any case, more and more people are flocking to hardware stores. There is everything you need if you want to lend a hand at home. Hardware stores are happy, they have been seeing an increase in sales for years, not only despite Corona and many other disasters, but precisely because of it. Every storm that hits the country makes hardware store cash registers ring. Every heavy rain, every hail, every flood guarantees an increase in income.

A billion dollar market continues to grow

Thus, sales of DIY and DIY stores in Germany could amount to 25.6 billion euros last year, according to an estimate by the professional association DIY, construction and gardening. This would correspond to a small decrease of 800 million euros compared to the previous year, but would be at a record level compared to previous years. The €20 billion barrier was surpassed for the first time in 2020 and is now slowly approaching, with fluctuations, the €30 billion mark.

The increase in sales of construction chemicals in the hardware assortment shows that the construction plan of DIY enthusiasts is not just about “beautifying”, but also tackling more important projects. In 2022, sales of more than €2.5 billion were achieved in concrete, flowable screed, tile adhesives and adhesive bridges, to name just a small selection of construction chemicals, an increase of ten percent compared to 2021.

Sanitary and heating installations also increased rapidly, with sales of around €2.2 billion in 2022, an increase of more than 20 percent compared to the previous year. Figures for 2023 are not yet available, but there are some signs that the positive trend will continue. Many homes need improvements, especially in the area of ​​heating. That is why the controversial heating law of the Minister of the Economy, Robert Habeck, which provides for the phasing out of oil and gas heating, also generates additional sales in DIY and DIY stores.

Craft services have become incredibly expensive.

An example of this: With a smile on his face, the plumber handed the bill to his client. He accepted it with a smile. How much could that cost? he thought to himself. It was only a few hours of work. Connect a kitchen sink and dishwasher. And a few more things in the bathroom. And the boiler, yes, was also quite calcified. However, at the first quick glance at the bill, his smile froze. Wow, I didn't expect such a large amount. Crazy, he thought.

Does the scene sound familiar to you? The fact is that craft services – if they are even obtainable – have become incredibly expensive. This is not entirely the fault of the artisans, that is clear. The infamous additional salary costs alone represent a huge amount of money on each bill. The numerous taxes on various social insurances, such as health and pension insurance, have to be paid by artisanal businesses and have to be collected in some way. This is one of the reasons, but of course Habeck has more than increased it in Germany and the country complains about the additional costs.

Of course, the DIY trend is not an exclusively German phenomenon: storms and new laws for building renovation to protect the climate are such factors that exist all over the world, including the USA. And here too More and more people are flocking to hardware stores. House deposit For example, the largest hardware store chain in the world could record record sales of more than $157 billion in 2023, after $151 billion in 2022. The evolution of Lowe's is similar, number two behind Home Depot. For the financial year 2022, which ended in March 2023, the group recorded sales of more than $97 billion, around $1 billion more than the previous year.

DiY: this is how it works when investing

But let's go back to Germany. It is mainly five retail chains that dominate the private construction supplies market. These are Obi with a turnover of 4.4 billion euros in 2022, Bauhaus with 4.4 billion euros, Hornbach with 3.4 billion euros, Toom/B1 with 3.2 billion euros and Hagebau with a turnover of 3.0 billion euros in 2022. All increased compared to 2021. For 2023, the numbers are arriving little by little, stagnation at a high level is to be expected.

Obi, Bauhaus, Hornbach, Toom/B1 and Hagebau top the scale of popularity among German DIY craftsmen. Instead, they tend to live in the shadows among domestic DIY investors. This is probably simply because the national stock market hardly offers anything in this regard. While American investors, Home Depot and Lowe's, two large global hardware chains, can trade on the stock market, German investors only have Hornbach's papers at their disposal. Hornbach is a holding company whose subsidiaries are engaged in the hardware business. A subsidiary is Hornbach Baumarkt AG, which also includes the well-known Hornbach DIY stores. The rest of the hardware stores are not listed on the stock exchange and some belong to retail chains such as Tengelmann, co-owner of Obi, and Rewe, owner of Toom/B1.

Many people have already purchased basic equipment for kitchen and bathroom installations at their local hardware store. It certainly wasn't cheap, but it should pay for itself with the next repair. DiY, you can tell the installer with a smile. For a change, the smile will freeze on your face. But please do this only when it comes to small things where the expert does not always have to come immediately. I'm sure he understands what I mean.

Please note the disclaimer.

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