Table of Contents
AMA Research are pleased to announce the publication of the seventh edition of the report ‘Building and Home Improvement Products Distribution Market Report – UK 2013-2017 Analysis’. The report provides an informed and up-to-date review of this market and includes a review of recent market trends and forecasts over the next few years. The report contains
DETAILED ASSESSMENT OF BUILDING & HOME IMPROVEMENTS MARKET –analysis of market structure and recent developments.
HIGHLY FRAGMENTED MARKET – key distribution channels including builders merchants, DIY multiples, direct supply, electrical wholesalers, garden centres, specialist distributors, department & variety stores and Internet & mail order.
ANALYSIS BY PRODUCT GROUP - market size, product mix and distribution.
FORECASTS OF MARKET DEVELOPMENTS TO 2017.
Despite difficult market conditions in 2012/13, it is worth highlighting that the total UK construction industry is still worth over £100 billion at contractors prices in 2012 – accounting for around 7% of the UK economy.
Within this total, the UK market for building and home improvement products and materials is valued at around £40 billion and this report provides a broad overall assessment of the market, key product sectors, distribution channels and their relative strengths in different product sectors.
Of particular interest:
Review of key channels - distribution channel shares, growth of Internet etc.
Identification of key players in the market.
Key product groups – £40 billion market - product sector sizes, distribution channel shares for different products, recent and future changes etc.
Forecast of market performance in 2013 through to 2017 and analysis of the key factors affecting future performance.
Key areas of coverage in the report include:-
Building and home improvement product distribution market – analysis by value from 2007-2012, with forecasts to 2017, key characteristics of this c. £40 billion market.
Market infrastructure - suppliers, distributors, contractors, specifiers and end-users.
Overview of key distribution channels – dominance by merchants and DIY multiples in a highly fragmented market. Product mix in Merchants and DIY multiples channels.
Impact of the recession on the structure of the market - market trends and major factors influencing market development.
Builders and Plumbers Merchants – shares of leading merchants, company structure, turnover and branch numbers of key players.
DIY Multiples – shares, company structure, turnover & branch numbers of key players.
Independent Hardware & DIY Stores – characteristics, branch numbers and turnover.
Other channels – including electrical wholesalers, garden centres, Internet & mail order etc.
Market shares of key distribution channels – by major product group, strengths & weaknesses, comparisons of performance 2002-12.
PRODUCTS AND SUPPLIERS
Product groups reviewed - decorating materials, bathrooms, kitchens, garden products, hardware, electrical products, roofing & insulation, bricks, blocks, cement & plaster materials, timber & glazing and heating, plumbing & drainage products.
Overall sector sizes for each product group, mix between channels.
Estimated shares in 2012 of the main product groups by the key channels.
Analysis by product group - market size 2007-2013 and product mix within each sector, recent trends, future prospects etc.
Distribution channel mix for each product group.
Forecast of market development – short & medium term prospects up to 2017.
Positive and negative factors affecting the market – performance of UK economy, housebuilding, non-domestic construction, consumer confidence & spending etc.The UK building and home improvement products distribution market was worth an estimated £37.5 billion at distributors selling prices in 2012. The market, which comprises a vast range of products, routes to market and end-use applications, is large and mature and traditionally has tended to experience modest change. However, the economic climate, high inflation and living costs have continued to influence the market in 2011 and 2012, impacting on high value home improvement projects in particular. In addition, public sector capital expenditure cuts began to impact construction and RMI expenditure in the non-domestic sector.
Heavyside materials account for around 59% of the market and are therefore an important group that is dependent primarily on new construction projects and major RMI work. Other key sectors includes the garden products market, although this sector is highly weather dependent as illustrated by the unprecedented weather in 2012 and the 7% fall in value.
The downturn has resulted in extremely difficult trading conditions for all distribution channels, with sales in all product groups declining. The rate of decline varied between product groups with heavyside products the worst hit, while the garden products sector benefited from the ‘grow-your own’ trend, helping to underpin the DIY multiple and garden centres markets. The economic downturn saw homeowners switching from ‘get-someone-in’ to ‘do-it-yourself’, which also generally favours the DIY multiples and indeed the latter market has fared better than the merchants market.
Since the start of the economic downturn many distributors have undertaken a range of cost-cutting exercises, changing spending plans and cutting jobs. The national merchants have shed the largest numbers of jobs and have been most exposed to the reduction in major construction projects. Some of the smaller merchants have faired better as the focus has shifted towards smaller construction and RMI projects favouring local supply.
Many distributors have also focused on the expansion of the traditional customer base to widen sales opportunities, e.g. Trade counters in B&Q stores, along with improvements to service and product offerings to attract more upmarket customers.
The market is complex, with a small number of large organisations competing with many regional and local organisations. The leading group of players now consists of 4 builders & plumbers merchants and 3 DIY multiples.
Overall construction output for 2013 is expected to remain at 2012 levels at a value of around £115bn. The non-domestic end use sectors are forecast to fare quite differently in the short to medium term, with the public sector generally expected to perform quite poorly while some private sectors are expected to perform more positively. The housing sector experienced a return to growth in 2010-12, which is forecast to continue with modest annual increases through to 2015, when output is forecast to be around £49.6 billion. Restrictions on mortgage lending are likely to continue to constrain the overall housing market.
The building and home improvement distribution market is expected to recover and be worth an estimated £43.85 billion in 2017, restored to a value similar to that achieved in 2007 before the recession hit.
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