We operate in the home and general merchandise market, worth approximately £55 billion in terms of retail sales. With £5.5 billion worth of sales reported for our last financial year, we hold a 10% share of this market.
We continue to maintain leading market positions in the product categories in which we trade.
Homebase trades within the DIY and home enhancement market, which in the UK is a very fragmented market comprising the 'sheds' together with a significant number of specialists and independents. These two components are each estimated to represent about 50% of the overall DIY and home enhancement market. The sheds market, until recently, contained the UK's four DIY shed retailers, these being B&Q, Wickes, Focus DIY and Homebase. Following the administration and subsequent closure of Focus DIY in 2011, the sheds market now consists of only B&Q, Wickes and Homebase. A third-party source, Gfk, tracks the sheds market and it is this metric against which Homebase's performance is measured to ascertain its market share.
For this financial year, both the overall DIY and home enhancement market and the sheds market, as measured by Gfk, have declined. The sheds market is divided into five product categories, these being:
Over the same period, Homebase has held or gained market share in each of these five product categories, with the strongest market share gain being within the big-ticket category. Over the last three years Homebase has significantly improved its big-ticket offer, which principally comprises kitchens, bathrooms and bedrooms and it has also introduced a highly regarded installation service. As a result of these initiatives, Homebase has seen its share of the big-ticket market increase from 20% to 22% over this three-year period. Homebase now holds an overall share of 23% of the sheds market; its highest recorded share since the Gfk sheds market research was launched in 2007.
Unlike Homebase, Argos operates over a much broader spectrum of product categories. There are 24 markets in which Argos operates, with no single metric existing that measures Argos' market share performance across all these categories. Argos refers to these 24 markets as 'tracked markets', and each market is reported on by a third-party source such as Gfk, National Purchase Diary (NPD) and the Office of National Statistics (ONS).
Over the last financial year, these tracked markets have
indicated that Argos' total market has declined by about 5%, with
many categories, especially those that are product innovation
driven or are susceptible to overlap by other technologies,
recording double-digit declines. Argos has seen the overall
consumer electronics market, as defined by Gfk, decline by around
20%, with audio, televisions (TV), mobiles and video gaming systems
(VGS) seeing the greatest declines.
Argos has grown its market share within the TV category despite a substantial decline in the market, but it has lost its share in VGS due to the concious decision not to compete with loss-leading deals that existed in the market place at some points during the financial year. In contrast to these market-declining categories within consumer electronics, there was considerable growth in laptops and tablets, driven by new technology such as the iPad and Kindle, and Argos recorded strong market share gains in this particular area.
The electricals market, which encompasses the large and small domestic appliances markets, also saw an overall decline in the financial year. Despite this, Argos held its market share within this category. Argos saw a small market share loss within furniture, a market which continued to suffer from record low levels of housing transactions and a reluctance of Argos' core customers to spend on big-ticket furniture purchases for the home. However, this was offset by market share gains in homewares as consumers, instead, spent on smaller ticket items to enhance their homes.
Overall Argos saw a small loss in market share across the total of its tracked markets for the financial year. However, if the exceptional market declines seen in VGS, where Argos deliberately reduced its participation, and audio, were excluded, Argos would have held share across its market categories.
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