Our purpose as a business is to help trade customers achieve exceptional results for their customers, and to profit from doing so. We believe the best way to source and install a kitchen is to work with a local tradesperson, and we are clear that the future success of our business lies in serving the trade market to the highest standards.
Our depots build strong local relationships with their customers and have the autonomy and trade quality in-stock products to provide a high level of service. Depots are located where our customers need them, with a typical Howdens depot being in an edge-of-town location - this is more convenient for our customers and cheaper for us to rent. In 2020 around 85% of our UK customers lived within 5 miles of a Howdens depot.
Our decentralised business model empowers local depot managers to build trusted trade-only relationships and we help our trade customers succeed in selling to their customers in the following ways:
In 2022, we opened 30 new UK depots, 5 new Republic of Ireland depots, and 25 new France depots (and closed 5).
One of our strategic objectives is to increase trade convenience and grow our market share by reaching more builders. We know that adding a new depot near to an existing one sees overall sales increase and we continue to see scope for around 1,000 depots in the UK, including c.25 in Northern Ireland, and we plan to open around 30 new depots in 2023.
We are opening all new depots in an updated format to use space more efficiently and to provide the best environment in which to do business.
We have also continued with our revamp programme for existing depots, concentrating on our older estate where the largest incremental sales uplifts are expected. The programme is delivering additional sales and has received very positive feedback from depots and customers.
During the year, including relocations, we reformatted a total of 82 depots, taking the total number of reformatted depots to 185 at the year-end.
The scale and scope of the revamps has been refined and, in 2023 we will shorten the reformatting timetable in some cases, reducing disruption to the refit and lowering, where appropriate, costs by modifying the scope and scale of some revamps to maintain incremental returns.
Overall, we will continue to target a payback of up to 4 years for these projects. Including relocations, we plan to revamp around 80 more depots in 2023. By the end of 2023 we expect to have around 50% of all UK depots, trading in the updated format.
Our international operations, predominantly based in France continue to make good progress. The business model for France is similar to the UK with a market size in kitchens of around €4.3bn (excluding appliances).
The French market has low penetration rates of integrated kitchens, and most are purchased through DIY outlets and specialist small independent businesses
Since 2019, we have been opening depots in small clusters within cities which benefit from word of mouth between customers and our ability to build a local and trusted brand. Clustering also helps to build the Howdens culture within our business teams.
By the end of 2022 we increased the number of depots trading in France and Belgium to 60 with a significant proportion in the Paris metro area. We are continuing to selectively invest in expanding the business and expect to open around 30 depots in the next two years with around 10 new depots in 2023.
We believe appreciation of the advantages of our trade-only in-stock model, our service levels and competitive pricing is growing, and with around 90% of product common to our UK ranges this helps us realise scale benefits.
We are using a similar approach to that in France, adapted to fit the population distribution of the Republic of Ireland and with the depots supported by our UK infrastructure. During 2022 we opened our first 5 depots clustered around Dublin. Our arrival in the Irish market has attracted much attention locally and we are encouraged by depot sales to date. In 2023, we plan to have at least 10 depots trading by the end of the year. This city-based approach fits with Irish population distribution and the depots can be supported by the UK.