Fast Market Research recommends "Home Improvement in Argentina" from Euromonitor International, now available
Boston, MA -- (SBWIRE) -- 08/21/2014 -- In Argentina, home improvement activities of medium to large scale are mainly done through a very fragmented marketplace of small and medium intermediary companies. After the large expansion of specialist retailers seen over the last decade, people have been increasingly doing small and medium repairs by themselves as these retailers offer all raw materials and instructions needed to perform these kinds of home improvements and repairs. However, given the high inflation rate of near 27% in 2013 and contracting purchasing power, DIY continued to increase in the last two years.
Ferrum leads in home improvement and was the best performing company in 2013. The company has a high participation in bathroom and sanitary ware with a 45% share in retail value sales and 14% in kitchen sinks. In 2012 and again in 2013, home improvement and modifications as a response to a stalled real estate grew and drove Ferrum's sales in both categories, besides the import barriers that helped to avoid cheap overseas competition.
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Imports barriers are expected to remain in place for a large part of the forecast period. Foreign reserves at the Central Bank continue to be under severe pressure from companies, investors and individuals due to a high increase in the inflation rate and a contraction in economic activity. In 2013, the inflation rate as estimated by private consultancy firms reached 27%, well above the rate reported by official sources of around 12%. As for the general retail environment, sales across consumer markets continue to fall at rates near 2% in volume terms - as reported by CAME, a local medium enterprise chamber - as the government prioritised building up reserves at the Central Bank at the cost of economic activity by strengthening imports barriers in 2012 and 2013. The government is also facing foreign financial obligations due in 2014 and 2015 of near US$20,000 million and currently foreign reserves reach only US$27,000 million, giving some insight of the low probability that imports barriers will be removed in the short term. Furthermore, a shrinking trade balance caused by both increasing imports of energy, due to lower local supply and lower exports brought about by an adverse international context, gives another insight into where trade restrictions are heading.