Home Improvement Retailing in Brazil Market Snapshot to 2015

Home Improvement Retailing in Brazil: Market Snapshot to 2015

Reference code: RT0680MS Published: March 2011

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© ICD Research. This report is a licensed product and is not to be photocopied

TABLE OF CONTENTS

TABLE OF CONTENTS 1

INTRODUCTION ..................................................................................................................... 5 1.1 What is this Report About? ............................................................................................................... 5 1.2 Definitions ........................................................................................................................................ 5

2 3

CATEGORY OVERVIEW ........................................................................................................ 8 SALES DATA ......................................................................................................................... 9 3.1 Sales Value 2005-10 ........................................................................................................................ 9 3.2 Category Analysis, Sales 2010........................................................................................................10 3.3 Sales Value Forecast 2010-15 ........................................................................................................11 3.4 Category Analysis, Sales Forecast 2015 .........................................................................................12

4

APPENDIX ............................................................................................................................ 13 4.1 Research Methodology ...................................................................................................................13 4.1.1

Additional Notes ........................................................................................................................................ 13

4.2 Contact Us ......................................................................................................................................13 4.3 About ICD Research .......................................................................................................................14 4.4 Disclaimer .......................................................................................................................................14

Home Improvement Retailing in Brazil: Market Snapshot to 2015 © ICD Research. This report is a licensed product and is not to be photocopied

Published Mar 2011 Page 2

TABLE OF CONTENTS

LIST OF TABLES Table 1: ICD Research Retail Channel Definitions ......................................................................................................................5 Table 2: ICD Research Retail Category Definitions .....................................................................................................................6 Table 3: Home Improvement Retailing in Brazil, Sales Value (US$ Billion), 2005-10 .....................................................................9 Table 4: Home & Garden Products Retailing in Brazil, Category Analysis by Sales, 2010 ...........................................................10 Table 5: Home Improvement Retailing in Brazil, Sales Value Forecast (US$ Billion), 2010-15 ....................................................11 Table 6: Home & Garden Products Retailing in Brazil, Category Analysis by Sales, 2015 ...........................................................12



TABLE OF CONTENTS

LIST OF FIGURES Figure 1: Home Improvement Retailing in Brazil, Sales Value (US$ Billion), 2005-10 ....................................................................9 Figure 2: Home & Garden Products Retailing in Brazil, Category Analysis by Share, 2010 .........................................................10 Figure 3: Home Improvement Retailing in Brazil, Sales Value Forecast (US$ Billion), 2010-15 ...................................................11 Figure 4: Home & Garden Products Retailing in Brazil, Category Analysis by Share, 2015 .........................................................12



INTRODUCTION

1 INTRODUCTION 1.1 What is this Report About? This report is the result of ICD Research’s extensive market research covering the Brazilian retail industry. It provides detailed historic and forecast retail market values segmented at category level.

1.2 Definitions The retail industry can be segmented into the following channels and categories: Table 1: ICD Research Retail Channel Definitions Channel group

Channel

Definition

Discount Retailers

Cash & Carries & Warehouse Clubs

Cash & carries sell from a wholesale warehouse to customers (small retailers, professional users, etc) who pay on the spot and transport goods away themselves. Warehouse clubs are no-frills stores that sell discounted goods to members who pay an annual fee. Delivered wholesale sales are not included.

Discount, Variety Store & General Merchandise Retailers

The discount/variety stores category includes all sales through stores that sell inexpensive items (especially cleaning supplies, toys, and confectionery) at a single or limited number of price points and are named for the price of the merchandise (e.g. dollar store, pound store). General merchandise includes all sales through stores that offer a wider selection of primarily non-food goods at inexpensive prices.

Convenience Stores & Gas Stations

Includes all sales through stores of an area generally less than 300 sq m that specialize in a limited range of Food & Grocery products designed primarily for convenience-seeking consumers. This category also includes sales in retail outlets attached to gas stations where fuel is the main revenue driver, kiosks, and newsstands.

Department Stores

Includes all sales through multi-category retailers, focusing primarily on non-grocery categories with distinct departments specializing in defined product areas. Examples include Bloomingdale's, Macy's, John Lewis, El Corte Ingles

Hypermarkets & Supermarkets

Hypermarkets/mass merchandisers include all sales through retailers with a floor area of over 2,500 sq m that carry full lines of both grocery and general merchandise (e.g. Wal-Mart). Supermarkets include all sales through retailers with floor area of 300 sq m -2,500 sq m that offer a wide, departmentalized range of grocery, and may carry some general merchandise lines (e.g. Sainsbury's, Kroger).

Vending Machines

Includes paid-for sales from all vending machines not located within a store (e.g. public places, workplaces, pubs and bars)

Other General Retailers

Includes other generalist retail channels not included in the categories above (e.g. market traders, charity stores, student union stores).

Clothing, Footwear, Accessories & Luxury Goods Specialists

Includes all sales through retailers where clothing, footwear, accessories and/or luxury goods are the main footfall drivers and account for the majority of sales.

Drug Stores & Health & Beauty Stores

Includes all sales through beauty/cosmetics specialists, drug stores, pharmacists, health stores and opticians.

Duty Free Retailers

Includes all sales through airside retailers in airports or on board an aircraft or ferry. Excludes tax free purchases by tourists at conventional stores.

Electrical & Electronics Specialists

Includes all sales through retailers where electricals and/or electronic goods are the main footfall drivers and account for the majority of sales.

Food & Drink Specialists

Includes bakers, butchers, delicatessens, drinks specialists, fishmongers, greengrocers, and single category stores (e.g. stores selling only cheese, or only olives, or only honey)

General Retailers

Specialist Retailers



INTRODUCTION Table 1: ICD Research Retail Channel Definitions Channel group

Online Retailers

Channel

Definition

Home Furniture & House Wares Retailers

Includes all sales through retailers where floor coverings, furniture and/or house wares are the main footfall drivers and account for the majority of sales.

Home Improvement & Gardening Supplies Retailers

Home improvement includes all sales through retailers that specialize in the sale of home improvement tools and materials, primarily aimed at consumer rather than trade needs (e.g. Home Depot, B&Q). Gardening supplies encompasses all sales through retailers that specialize in the sale of plants and related tools and products

Music, Video, Book, Stationery & Entertainment Software Specialists

Includes all sales through retailers where books, entertainment software, music, stationery and/or video products are the main footfall drivers and account for the majority of revenues.

Other Specialist Retailers

Includes all sales through flower stores, gift stores, jewelers, pet stores, and other stores that focus on one specific product or category (e.g. sunglasses stores)

Overall

Includes all sales of the relevant category that take place over the Internet, irrespective of whether the vendor is a pure-play Internet company or the online offering of a realworld retailer.

Source: ICD Research analysis

/ © ICD Research

Table 2: ICD Research Retail Category Definitions Category group

Category

Definition

Apparel, Accessories & Luxury Goods

Clothing & Footwear

Includes all footwear categories, baby clothing, toddler clothing, and active wear, casual wear, essentials, formalwear, formalwear-occasion, and outerwear for men, women, boys and girls.

Jewelry & Watches

Includes gold jewelry, silver jewelry and other precious jewelry such as diamonds, platinum, precious stones (sapphires, emeralds and rubies), pearls (natural and cultured) and semi-precious stones (e.g. quartz, opal, topaz, amethyst, coral etc.), fashion jewelry (non-precious jewelry), hair accessories, belts, hats, gloves, scarves, sunglasses and ties, plus watches.

Luggage & Leather Goods

Includes suitcases, travel bags, briefcases, handbags, wallets and purses.

Printed Media

Includes paperback, hardbound books, and books sold from internet sites such as Amazon, with the exception of e-books. Books sold to libraries are excluded. Retail sales of newspapers, periodicals, and magazines are included, but subscription copies are not.

Stationery & Cards

Includes personal stationery products such as notebooks, erasers, pencils, rulers, sharpeners, writing boards, exam boards, graph books, pencil boxes, geometry boxes, notebook covers, glue sticks, maps, paper clips & binders, pencil grippers, calculators, etc that are sold through retail channels excluding office supplies. Cards include seasonal and every day cards.

Communications Equipment

Includes retail sales of only answer machines, fax machines, fixed-line telephones, mobile phone accessories and mobile phones.

Computer Hardware & Software

Includes retail sales of only desktops and laptop computers, software, memory sticks, CD packs, hard disks and other data storage devices, computer peripherals, PDAs, organizers, calculators, and satellite navigation systems.

Consumer Electronics

Includes CD players, DVD players/recorders, hi-fi systems, home theatres, in-car entertainment systems, portable digital audios, radios, televisions and video recorders, home use and portable games consoles.

Household Appliances

Includes major domestic appliances (air conditioners, dishwashers, dryers, freezers, hobs and extractors, microwave ovens, refrigerators, stoves, vacuum cleaners and washing machines) plus minor domestic appliances (blenders, coffee machines, deep fryers, food processors, grills, hair products, hair trimmers, curling tongs, razors, handheld mixers, irons, juicers, kettles, stand mixers, toasters, sun lamps and fans).

Books, News and Stationery

Electrical & Electronics



INTRODUCTION Table 2: ICD Research Retail Category Definitions Category group

Food & Grocery

Furniture & Floor Coverings

Home & Garden Products

Music, Video & Entertainment Software

Sports & Leisure Equipment

Category

Definition

Photographic Equipment

Includes camcorders, cameras, projectors, camera and camcorder accessories, binoculars and telescopes.

Drinks

Includes retail (not on-trade) sales of soft drinks, hot drinks and alcoholic drinks.

Household Products

Includes retail sales of only air fresheners, bleach, dishwashing products, furniture cleaning products, general-purpose cleaners, insecticides, paper products, scouring products, textile washing products and toilet care products.

Packaged Food

Includes retail (not foodservice) sales of bakery and cereals, canned food, chilled food, confectionery, dairy products, dried food, frozen food, ice cream, oils and fats, sauces/ dressings/condiments, savory snacks, soup and spreads.

Personal Care

Includes retail sales of fragrances, hair care, make-up, oral hygiene, over-the-counter healthcare, personal hygiene and skincare/sun care. Prescription drug sales are not included.

Tobacco

Includes retail sales of chewing tobacco cigarettes, cigars and cigarillos, and loose tobacco (including vending machine).

Unpackaged Food

Includes retail (not foodservice) sales of unpackaged fruit, vegetables, meat, grains, and other food categories

Floor Coverings

Includes retail (not trade) sales of carpets, mats, rugs, carpet tiles, hard tiles, laminates, final and wood flooring.

Furniture

Includes retail sales of domestic furniture, including bedroom furniture, dining room furniture, home office furniture, living room furniture, kitchen furniture and bathroom furniture. This category does not cover contract furniture.

Gardening & Outdoor Living

Includes garden buildings, manual and electric garden tools, garden utensils, outdoor living products (garden furniture, barbecues, ornaments), and plants and growing media (bulbs, compost, domestic fertilizer, flowering plants, seeds, shrubs and trees).

Home Improvement

Includes retail (not trade) sales of decorating materials (paint, varnish, wall tiles, wallpaper), electrical hardware (alarms, light fittings, plugs, switches), hardware (brackets, locks, nails, bolts, nuts), other materials (adhesive, aggregates, boards, cement, doors, window frames, glass, bricks, timber), and manual and power tools.

Home Wares

Includes retail sales of home hardware (crockery, cutlery, glassware, rubbish bins, storage, mechanical utensils and home devices e.g. scales), lamps and lampshades, textiles and soft furnishings (bathroom textiles, beddings, cushions, futons, hammocks, mattresses, table linen, furniture covers, doormats), and window dressings (blinds, curtain poles, rails, curtains, hooks).

Games Software

Includes retail sales of games for domestic games consoles, handheld games consoles, mobile phones and other wireless devices, and games for PC/Mac desktop computers. Online games are excluded (e.g. Second Life). Console hardware sales are excluded.

Music & Video

Includes retail sales of prerecorded music singles, CDs, VCDs, DVDs and Blu-Ray disks, and paid downloadable music/video.

Sports Equipment

Includes retail sales of ball sports equipment, adventure sports equipment, fishing equipment, golf equipment, racket sports equipment, winter sports equipment, and all other sports-dedicated equipment sold at retail.

Toys & Games

Includes retail sales of action figures, activity toys, dolls, games, infant/baby toys, miniature models, plush toys, puzzles, ride-on model toys, and toy vehicles. / © ICD Research

Source: ICD Research analysis



CATEGORY OVERVIEW

2 CATEGORY OVERVIEW Following expansion at a compound annual growth rate (CAGR) of 17.28% between 2005 and 2010, the Home Improvement category in Brazil had sales of US$19.5 billion in 2010, an increase of 20.7% on 2009. The Home Improvement achieved its strongest performance in 2007, with an increase of 28.0% compared to the previous year. The category witnessed a decline of -2.4% in 2009 over 2008. In comparison, the fastest growing category under Home & Garden Products was Homewares, with a CAGR of 17.84% between 2005 and 2010. To the contrary, the Gardening and Outdoor Living category grew at a CAGR of 13.20%, the lowest growth rate under the Home & Garden Products category group between 2005 and 2010. By 2010, the Home Improvement category led the Home & Garden Products category group with a market share of 53.3%. In comparison, the Homewares category represented a market share of 29.9%, while Gardening and Outdoor Living generated a further 16.9% share of the group in 2010. Looking ahead, the Home Improvement category will grow at a CAGR of 10.57% between 2010 and 2015, reaching sales of US$32.2 billion in 2015. This represents a total growth of 266.8% from 2005 and 65.3% from 2010. In comparison, the fastest growing retail category of the Home & Garden Products category group between 2010 and 2015 will be Home Improvement, achieving a CAGR of 10.57%. The Gardening and Outdoor Living category will grow at a CAGR of 9.03%, the lowest growth rate in the Home & Garden Products category group between 2010 and 2015. By 2015, the Home Improvement category will account for 54.2% of the Home & Garden Products category group. In comparison, the Homewares category will account for 29.8%, while the Gardening and Outdoor Living category will generate a further 16.0% share of the group in 2015.



MARKET DATA

3 SALES DATA 3.1 Sales Value 2005-10 The Home Improvement category in Brazil had sales of US$19.5 billion in 2010, an increase of 20.7% on 2009. The category achieved a CAGR of 17.28% over the period 2005-10. Table 3: Home Improvement Retailing in Brazil, Sales Value (US$ Billion), 2005-10 Year

US$ Billion

2005

8.8

2006

10.9

24.5%

2007

14.0

28.0%

2008

16.6

18.3%

2009

16.1

-2.4%

2010

19.5

20.7%

CAGR 2005-10

% Growth

17.28%

-

© ICD Research

Source: ICD Research Analysis

Figure 1: Home Improvement Retailing in Brazil, Sales Value (US$ Billion), 2005-10 25.0

30.0%

25.0% 20.0

15.0

15.0%

10.0%

10.0

Growth Rate (%)

US$ Billion

20.0%

5.0% 5.0

0.0%

0.0

-5.0%

2005

2006

2007 Sales Value



2008

2009

2010

Growth Rate (%)

© ICD Research


MARKET DATA

3.2 Category Analysis, Sales 2010 With sales of US$19.5 billion in 2010, the Home Improvement category in Brazil is the largest category, with a share of 53.3% in the Home & Garden Products category group. Table 4: Home & Garden Products Retailing in Brazil, Category Analysis by Sales, 2010 Category

US$ Billion

% Share

6.2

16.9%

Home Improvement

19.5

53.3%

Homewares

10.9

29.9%

Overall

36.6

100.0%

Gardening and Outdoor Living

© ICD Research


Figure 2: Home & Garden Products Retailing in Brazil, Category Analysis by Share, 2010 Gardening and Outdoor Living, 16.9%

Homewares, 29.9%

Home Improvement, 53.3%



© ICD Research


MARKET DATA

3.3 Sales Value Forecast 2010-15 The Home Improvement category in Brazil will have sales of US$32.2 billion in 2015, an increase of 65.3% on 2010. The category will grow at a CAGR of 10.57% from 2010 through 2015. Table 5: Home Improvement Retailing in Brazil, Sales Value Forecast (US$ Billion), 2010-15 Year

US$ Billion

2010

19.5

2011

21.2

2012

23.2

9.7%

2013

25.7

10.6%

2014

28.7

11.5%

2015

32.2

12.4%

CAGR 2010-15

% Growth

8.8%

-

10.57% © ICD Research


35.0

14.0%

30.0

12.0%

25.0

10.0%

20.0

8.0%

15.0

6.0%

10.0

4.0%

5.0

2.0%

0.0

Growth Rate (%)

US$ Billion

Figure 3: Home Improvement Retailing in Brazil, Sales Value Forecast (US$ Billion), 2010-15

0.0%

2010

2011

2012 Sales Value



2013

2014

2015

Growth Rate (%)

© ICD Research


MARKET DATA

3.4 Category Analysis, Sales Forecast 2015 With sales of US$32.2 billion, the Home Improvement category in Brazil will be the largest category, with a share of 54.2% of the Home & Garden Products category group by 2015. Table 6: Home & Garden Products Retailing in Brazil, Category Analysis by Sales, 2015 Category Gardening and Outdoor Living

US$ Billion

% Share

9.5

16.0%

Home Improvement

32.2

54.2%

Homewares

17.7

29.8%

Overall

59.4

100.0% © ICD Research


Figure 4: Home & Garden Products Retailing in Brazil, Category Analysis by Share, 2015 Gardening and Outdoor Living, 16.0%

Homewares, 29.8%

Home Improvement, 54.2%



© ICD Research


APPENDIX

4 APPENDIX 4.1 Research Methodology ICD Research’s series of Market Snapshot reports are rigorously sourced according to a comprehensive written methodology. We strictly follow a standardized research methodology to ensure high levels of data quality: Market data- ICD Research has a standard process for market data research across all of its products. Review of Existing Databases – ICD Research maintains databases of industry and company operational data and analysis, which are used as the foundation for our market modeling activities. Market Research – Collection of the latest market-specific data from a wide variety of respected industry sources at both a national and international level. Sources used include government statistics, trade associations, company filings, broker and investment analyst reports and information, and official international sources. Data Consolidation – ICD Research analysts benchmark data from internal and external sources to verify historical market data and to ensure that the latest year’s data is fully supported by external opinion. Creation of Market Models – ICD Research feeds the latest macroeconomic data and specific market drivers from national statistics offices and trade associations into its complex market models to generate market forecasts. Analyst Review – ICD Research’s experienced analyst teams, based on information collected from various sources across the industry, refine modeled forecasts. Quality Control – ICD Research rigorously conducts checks on its data and processes throughout the production of every market profile, to ensure that the highest levels of data quality are maintained across its portfolio. 4.1.1

Additional Notes

Figures in tables and charts throughout this report may not add up to totals due to rounding. Any currency calculations used in the generation of data within this report have been calculated using respective year’s annual average exchange rates.

4.2 Contact Us If you have any queries about this report or would like further information, please contact [email protected]



APPENDIX

4.3 About ICD Research ICD Research is a premium business information brand specializing in industry analysis.

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No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, ICD Research.

The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions and recommendations that ICD Research delivers will be based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such ICD Research can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect.



Home Improvement Retailing in Brazil Market Snapshot to 2015

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