Hornbach, a leading DIY and garden market chain, is shifting its focus towards international expansion for new store openings. According to Albrecht Hornbach, CEO and shareholder, the company sees greater potential for growth in markets outside of Germany.
“While there are still possibilities for new locations within Germany, the majority of our new stores will likely be established abroad” Hornbach stated in an interview with Handelsblatt. He cited the increasing difficulty of securing suitable locations within Germany compared to opportunities in countries like Romania.
The company is significantly scaling back its expansion rate, planning to open only a handful of new stores annually. This year, the target is four, a considerable decrease from past years when Hornbach opened as many as eleven locations in a single year. This slowdown is attributed to intensifying competition and rising costs, including land and construction expenses, which can reach 40 million euros per site.
Hornbach is seeing a growing contribution to its overall revenue from online sales. The pandemic spurred a significant increase, peaking at 20 percent of total revenue when physical stores were closed. Currently, online sales account for 13 percent and are steadily increasing, with the company projecting a potential one billion euro e-commerce turnover in the near future.
The company’s share price has been affected by a pervasive negative sentiment within the building materials retail sector, according to Hornbach. He expressed hope that government investment packages will soon stimulate growth, but cautioned that swift implementation is crucial to regain market confidence. “The government’s intentions need to translate into tangible results and reach the market quickly, otherwise, nobody will believe it”.
