The retailer, which currently operates a pop-up shop in Greenstone
Edenvale, as well as an online store, is set to come in direct competition with
Cashbuild and Massmart-owned Builders Warehouse.



The opening of Leroy Merlin will make it the third consumer-facing French
retailer to open in SA recently, after Decathlon in the sporting goods sector
and bakery chain Paul, which is looking to expand in Gauteng.

Almost 29 out of the 40 companies in the French stock market index have already
established in SA.

Leroy Merlin SA CEO Cedric Sennepin said the opening of the first store was
underway. “Two other sites under construction for opening in 2019
and a fourth store beginning 2020, all in Gauteng for the moment.”

Workshops

Explaining the decision to open in SA, he referred to the potential for home
improvements and the level of earnings by the population. “We have
the capacity not only to steal market share but increase the global market with
new practices, new offers and services, including workshops to learn how easy
it is for DIY to democratise.”

“It seems that the whole spectrum of consumers is currently under huge
pressure. It is difficult to speculate who has the most appetite for growth, as
I think everybody has the appetite but is hindered by the tough economic
environment.

I am sure we will see a good international competitor [Leroy Merlin] have an
impact on sales of the other competitors, especially at the middle to higher
end of the market”
, says Cashbuild CEO Werner de Jager 

Leroy Merlin is a part of Group Adeo, which employs 89,000 people across the
world, including in 32 autonomous companies in 13 countries dedicated to 15
retail chains.

In its local online store, appliances range from heaters, drills and workshop
equipment, as it aims to position itself as a low-to-middle income DIY store.

SA is also the first country in sub-Saharan Africa with the highest number of
French companies, ahead of West African countries such as Ivory Coast.

William Roos, the economic counsellor of the French embassy said: “French
companies in the retail sector have shown their ability to develop their
activities at international level. SA is a major country to invest in, it has a
strong internal market and it is a good gateway to the Southern African region
and more largely to all sub-Saharan Africa. Therefore, it is only logical that
French business would want to invest in SA.”

Roos said that part of the French group’s interest in leading markets could be
attributed to SA being considered as a mature market with a significant middle
class.

 

Source: Fastmoving