DIY brand Castorama is planning a voluntary redundancy plan that could affect up to 100 staff at its headquarters near Lille, or one in seven, while its competitor Leroy Merlin has also recently reduced its workforce in its core functions .
“The collective contractual termination applies only to voluntary employees of the brand’s headquarters. No store employees are affected,” Castorama said in a press release received Friday.
This system is part of a strategic plan Castorama launched in March, which aims to restore its profitability adn help it remain competitive “in an ever-changing competitive habitat”, the company added.
A brand of the British Kingfisher group, Castorama has a total of more than 11,000 employees and 95 stores in France.
“A decline in the image of the market”
After experiencing a DIY boom during the Covid-19 pandemic, the sector is gripped by disillusionment in France.
In the third quarter, Castorama’s sales fell 4.9% year over year, according to Kingfisher’s latest results released Monday. The british group, also owner of brico Dépôt (whose sales fell by 3.3% in the same period), attributes these negative figures to “weak consumer morale and unfavorable weather conditions”.
castorama’s big rival, Leroy merlin, also proceeded in recent months with a collective contractual termination at its headquarters in Lezennes, on the outskirts of Lille, which resulted in the departure of 130 employees, the brand told AFP on Friday, confirming Echoes’ facts.
Leroy Merlin’s turnover “decreased in line with the market”, a spokesperson added, without providing further details. “The main cause is the decline in real estate transactions and births,” which reduces the work done by the French, he explained.
With around 30,000 employees and 144 stores in France, according to its website, Leroy Merlin belongs to the Mulliez galaxy, also owner of the retailer Auchan, which announced at the beginning of November a massive social plan that puts 2,389 jobs in france at risk.
What impact will Castorama’s workforce reductions have on the future of DIY projects in France?
Interview: The Future of the DIY Market in France Amid Workforce Reductions
Editor: Welcome to the Time.news interview series! Today, we’re discussing the recent developments in the DIY sector in France, especially focusing on Castorama’s voluntary redundancy plan and its implications for the industry.Joining us is John Dupont, a seasoned retail analyst with over 20 years of experience in the home improvement market. Thank you for being here, John.
John Dupont: Thank you for having me. It’s a critical time for the DIY sector, and I’m glad to share my insights.
Editor: Castorama has announced a voluntary redundancy plan that could affect up to 100 employees at its headquarters. What does this signify for Castorama and the DIY market as a whole?
John Dupont: Its a blunt indicator of the challenges facing the DIY market in France right now. After an remarkable boom during the COVID-19 pandemic, we’ve seen a notable decline in consumer engagement. Castorama’s decision to potentially cut one in seven positions at its headquarters is a response to declining sales—down nearly 5% year on year. Such workforce reductions are often seen in industries facing decreased demand,and thay signal a shift in operational strategy to preserve profitability.
Editor: You mentioned the pandemic boom. What factors do you believe contributed to the subsequent disillusionment in the market?
John Dupont: Several factors are at play here. The initial surge in DIY projects during the pandemic was likely driven by increased free time and a focus on home improvement while people were confined. Though, as life returns to normal, consumer priorities have shifted.Add to this the effects of weak consumer morale and unfavorable weather conditions, which have been particularly impactful. Furthermore, decreased real estate transactions also limit the potential for new building projects, which many consumers may have previously engaged with.
Editor: Leroy Merlin, a major competitor of Castorama, has also seen reductions in staffing and turnover. What similarities can you draw between Castorama and Leroy Merlin in this context?
John Dupont: Both companies are experiencing the same market pressures—declining sales due to similar influences. leroy Merlin reported a decrease in turnover, closely mirroring Castorama’s situation. Both brands belong to larger groups, with Castorama under Kingfisher and Leroy Merlin under the Mulliez group, and they are tasked with adapting to a rapidly changing market. Their collective workforce reductions illustrate a broader trend in the sector where companies are not only reassessing their staffing needs but are also re-evaluating their strategies to remain competitive amidst these challenges.
Editor: What advice would you give to industry stakeholders who are navigating this downturn in the DIY sector?
John Dupont: First, it’s crucial for stakeholders to closely monitor consumer trends and preferences.Understanding why consumers are shifting away from DIY projects is essential. Companies should consider diversifying their offerings, perhaps focusing more on experiences or services rather than solely products. Secondly, investing in digital change and enhancing online shopping experiences can tap into a technologically savvy consumer base. Lastly, fostering customer loyalty through engagement strategies—like workshops or online tutorials—can reignite interest in DIY projects.
Editor: As Castorama and Leroy Merlin adjust their operations, how should consumers respond to these changes in the DIY landscape?
John Dupont: Consumers should stay informed about the evolving market dynamics. While companies may be reducing their product lines or workforce, there are still numerous opportunities for DIY enthusiasts. They can benefit from promotions or sales during this transition period as companies look to maintain customer interest. Moreover, this might be a perfect time for consumers to explore local hardware stores or independent suppliers that may offer personalized service and a wider variety of unique products.
Editor: Thank you for your insights, John.It appears that the DIY sector in France is undergoing significant changes, and your expertise sheds light on how companies can adapt and what consumers might expect in the near future.
John Dupont: My pleasure! It’s significant for all stakeholders to remain proactive and engaged as the landscape shifts. The DIY market will certainly continue to evolve, and those who can adapt will find opportunities for growth.
Editor: Thanks for joining us today. We’ll keep an eye on the developments in the DIY market as they unfold.