Kingfisher, the DIY retailer, is planning to cash in on a retail revolution that is transforming the lives – and the homes – of millions of Russians.

It is preparing to double the number of its Castorama stores in Russia next year and plans to open 50 in the country over the next ten years.

The driving force behind its plans is a Russian property boom. About 700,000 new homes are expected to be built every year for the next few years, many of which will be sold as empty shells in need of being fitted out from scratch.

Moreover, the existing housing stock is in desperate need of renovation after years under communism, when sourcing the necessary materials and labour to carry out repair work was difficult. About 70 per cent of Russians own their homes and about half of Russian households also have a dacha – a kind of informal country house or glorified shed surrounded by gardens, which is used either as a place to grow vegetables and plants or as a place for leisure time and summer barbecues.

As incomes rise, so Russians are keen to spend their new-found wealth on making their homes look good. The DIY market is rising at an estimated 12 per cent a year and customers spending more than about £390 in one visit make up more than 70 per cent of Castorama Russia’s business, demonstrating that most visitors are carrying out a complete project, rather than picking up a few cans of paint.

Kingfisher opened its first store in Russia last February and is expecting to open its fifth in Rostov in September. Its plan is to focus not only on the key cities of St Petersburg and Moscow, but also regional cities with a population of more than one million. Indeed, much of Kingfisher’s growth is expected to come from expansion into these regional cities in areas such as the Urals and Volga, where competition is less intense, property is cheaper and customers are as keen as their counterparts in the capital to improve their homes.

At present, about 70 per cent of home improvement goods are sold through outdoor markets. These markets are expected to lose out to the big box players, in the same way as many of the traditional food markets have lost out to supermarkets.

Oleg Pisklov, a former commercial director for Tesco’s Turkish operations who replaced Peter Partma as head of Kingfisher’s Russian operations this year, estimates that in the next five years the markets will have their share of DIY sales reduced to just 20 per cent, leaving plenty of space for big box retailers to expand even without the rapid growth in the overall DIY market.

However, Russian shoppers may not be so easily weaned off their traditional shopping habits. Some markets are trying to adapt themselves into a more comfortable environment and, apart from competitive prices, they also often offer knowledgeable advice from tradesmen who have been running their own small stalls for many years.

Western incomers also face a certain amount of competition from regional businesses and are struggling to find a way in which to sell to consumers many of whom are unfamiliar with DIY skills and can have difficulty finding reliable tradesmen to carry out installation.

Castorama wants to offer more services to cater to this “do it for me” market, but, with only four stores at present, it has yet to build up a network of relationships that can deliver reliably the same kind of home installation service offered by its sister chain B&Q in China, where – like Russia – most new flats are sold as empty shells.

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