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AMA Research are pleased to announce the publication of the 6th edition of the report ‘General Industrial Products Distribution Market Report – UK 2014-2018 Analysis’. The report includes up to date information on recent trends and issues that continue to impact on the market. The report contains:

•DETAILED ASSESSMENT OF THE MARKET - analysis of the market structure, key national distributors and recent developments in the market.


•HIGHLY FRAGMENTED MARKET - key distribution channels including industrial distributors, specialists and direct.


•ANALYSIS BY PRODUCT GROUP – health & safety, fluid & air control, power tools, hand tools, engineering & metalworking, workshop & maintenance, SSASH (storage, security, access, site equipment & handling), fasteners, janitorial and abrasives - market sizes, product mixes and distribution.


•FORECASTS MARKET DEVELOPMENTS UP TO 2018 – market size and factors impacting on the market.

The report focuses on the distribution of industrial / building consumables which represents a mature and highly fragmented market in terms of product range, customer base and applications in end-use sectors.



Areas of particular interest include:

• Market performance review and forecasts to 2018.


• Factors affecting the market and analysis of key market characteristics.


• Review of the distribution structure.


• Review of key players - product mix and market share estimates.


• Product group analysis – review of major product sectors, distribution channel shares for the different products.


Companies include:

Arco, Axminster Power Tool Centre, Brammer, Buck & Hickman, Bunzl, Cromwell Tools, Eriks Industrial Services, FWB Products, Greenham Trading, Hayley Group, HC Slingsby, Key Industrial Equipment, Machine Mart, Monks and Crane Industrial Group, MSC Industrial Supply Co, Northern Tool and Equipment Co, Parker Merchanting, Protec, RS Components, Screwfix Direct, Seton, Toolbank, Toolstation.

Key areas covered in the report include :

THE MARKET

• General Industrial Product Distribution market - market definition, size and recent market performance in 2012-14, factors impacting on the market.


• Product sectors reviewed - abrasives, janitorial, fasteners, fluid & air control, health & safety, power tools, hand tools, engineering & metalworking, workshop & maintenance and SSASH (storage, security, access, site equipment & handling).


• Key market influences - including manufacturing & engineering sectors, utilities and infrastructure sectors, legislation, development of multi-channel approach etc.


• Distribution structure – suppliers, distributors and end-users


• Review of key distribution channels – industrial distributors, the specialists and direct.


• Future prospects – market size and forecast trends up to 2018.


THE LEADING PLAYERS

• Review of key distributors – Arco, Screwfix, RS Components, Cromwell Tools, Brammer, Eriks Industrial Services, Toolbank, Parker Merchanting, Buck & Hickman, Monks & Crane, Machine Mart, Toolstation, Hayley Group, Seton, MSC Industrial etc.


• Market shares of key distributors – market positioning, overall shares etc, overview of market and recent trends.


• Profiles of key distributors – company structure, estimates of market shares, product mix and portfolio analysis.


• Key Competitors – including specialists, builders merchants, tool & plant hire companies, automotive aftermarket, buying groups and independents.


PRODUCTS AND SUPPLIERS

• Market size of product groups defined in report, with estimated shares within the industrial distributors market.


• Product groups – definition, distributors shares within each sector and product trends.


• Product distribution – estimated shares of industrial distributors and competing channels by each product sector (merchants, specialists, plant & tool hire, automotive and others including direct sales.


FUTURE PROSPECTS

• Future prospects for the general industrial products distribution market to 2018, with market size estimation.


• Factors affecting distributors market – positive and negative influences, trends in key sectors.

This is a difficult market to define, but within our definitions of the above products into ‘industrial’ applications, the UK industrial consumable products market is estimated to be worth £1.8 billion in 2014. This is a mature and highly fragmented market that experienced relatively stable conditions to 2007, before the adverse impact of the economic downturn in 2008, but has since recovered.

In a wider context, the overall size of the distributors market of products as defined in this report (including products outside our definition but supplied by the industrial distributors and those supplied in to end-use sectors other than industrial applications) is estimated to be around £3.0-3.3 billion in 2014.

The sector has an extremely fragmented customer base operating in a diverse range of end-use applications. Key end-user sectors include manufacturing, engineering, infrastructure, transport, construction, public authorities and utilities. Different sectors of the market tend to exhibit varying performances depending on their end-use application, which makes forecasting difficult. Some sectors of the market are relatively stable sectors (such as utilities and food & drink) whilst other sectors are more volatile / cyclical (such as the automotive sector which is susceptible to more substantial changes in end-user demand).

Key external factors impacting the market include the state of the economy and the relative performance of key customer sectors. Also impacting on the market are general levels of maintenance & repair, legislation, costs of fuel, energy & raw materials, and the volatility of Sterling (both in terms of impact on customers’ business operations and costs of imported products).

This is a highly fragmented market with some distributors operating in all product sectors defined in this report and others focusing on a more limited number of product sectors, resulting in variable performance between suppliers. There is a continued trend towards ‘one-stop sourcing’, which is particularly applicable to commodity type products and many distributors are expanding their product offering to provide an overall package. This trend has undoubtedly been helped by company websites which can display more products than shown in catalogues.

Product ranges are generally offered both in catalogues and on the Internet, with most leading companies also operating a branch network. Many of the larger companies are continuing to increase their branch numbers and UK coverage. However, the trend is moving towards online - some distributors have moved their focus to the Internet rather than catalogues and others no longer publish catalogues. Increasing numbers of distributors are offering a digital format catalogue and some companies provide hosted catalogues & other services. However, whilst some companies are seeing an increase in the e-commerce channel, others find that their customers prefer to continue using a hard copy catalogue.

The general industrial consumable products distributors operate in a high service market where customer service, delivery and range are paramount. This is a highly fragmented and competitive market, including a large number of small local and regional distributors as well as the national operators. Overall, the development of major corporate accounts usually requires the co-ordination of all sales methods including representation, catalogue and online, with an increasing emphasis on offering individual solutions for customers.

Distributors’ competitors vary according to the product group, but the key competing channels are the ‘specialists’ and ‘direct supply’. Key competitive strengths of the industrial products distributors include technical knowledge & support, extensive product ranges that underpins one-stop sourcing and development of value added services (such as vendor managed inventory).

The market continues to benefit from an increased focus on health & safety, energy efficiency and environmental issues, which have largely been legislation-driven and provide opportunities for industrial product distributors. Value added services are also important in this market, with demand for systems such as Vendor Managed Inventory (VMI) increasing, which tends to benefit the industrial distributors in particular.

As indicated above, the future performance of the market is closely linked to the overall state of the economy and general conditions in sectors such as manufacturing, engineering, transportation, utilities, public sector and construction etc. Also impacting on the market are the levels of maintenance & repair as well as legislation. Overall future prospects appear more optimistic than in recent years reflecting growing confidence in the recovery of the UK economy and that it will be sustained in the medium term, though wider global trends are more fragile.

Growth rates of the different product sectors are expected to vary to 2018, reflecting the performance of their end-use sectors, with for example the automotive sector expected to continue to help underpin the market. As mentioned above, the market is expected to have experienced growth in 2014, reaching an estimated market size of around £1.8bn. Further low level growth to 2018 is forecast, reaching an estimated market size of around £2 billion underpinned by recovery across a wide range of sectors.

Global events are expected to continue impacting on the UK economy and events in the Eurozone in particular are likely to affect the distributors market. Should the situation in the Eurozone deteriorate further than expected, the market is likely to be more subdued as manufacturing activity levels are heavily dependent on exports to key EU markets. The future performance of individual distributors will primarily depend on their product and customer profile, together with regional strengths, pricing and stockholding strategy. Also value added services provide opportunities for the distributors and those offering services such as VMI are likely to benefit from customers requiring added-value support.

The long-term level of demand for products supplied by industrial distributors varies regionally throughout the UK, reflecting Government and EU investment strategies, local industry specialisation, geographical, seasonal and climatic features.

Table Of Contents

General Industrial Products Distribution Market Report - UK 2014-2018 Analysis
1. INTRODUCTION 8
1.1 INTRODUCTION 8
1.2 SOURCES OF INFORMATION 8
2. SUMMARY AND FUTURE PROSPECTS 10
2.1 SUMMARY 10
2.2 FUTURE PROSPECTS 12
3. ECONOMIC ENVIRONMENT 15
3.1 GDP 15
3.2 INFLATION and INTEREST RATES 16
3.3 UNEMPLOYMENT 17
3.4 HOUSEHOLD CONSUMPTION 18
3.5 HOUSING and CONSTRUCTION 18
3.6 STERLING 19
3.7 POPULATION PROFILE 20
3.8 CONCLUSIONS 20
4. THE MARKET 22
4.1 MARKET DEFINITION 22
4.2 MARKET STRUCTURE 24
4.2.1 Distribution 24
4.2.2 Competitive Channels 25
4.2.3 Overall Market Size of the Distributors of the (Defined) Industrial Consumable Products 26
4.3 MARKET SIZE 28
4.3.1 Background and Current Performance 30
4.3.2 Future Prospects 31
4.4 CUSTOMERS OF INDUSTRIAL DISTRIBUTORS 35
4.5 KEY MARKET INFLUENCES 35
4.5.1 Manufacturing and Engineering Sector Influences 35
4.5.2 Legislative Influences 39
4.5.3 Infrastructure 40
4.5.4 The Energy Sector 43
5. MAJOR DISTRIBUTORS OF INDUSTRIAL PRODUCTS 45
5.1 INTRODUCTION 45
5.1.1 Market Shares 47
5.2 MAJOR INDUSTRIAL PRODUCT DISTRIBUTORS 48
5.2.1 Arco 49
5.2.2 Screwfix Direct 50
5.2.3 RS Components 51
5.2.4 Cromwell Tools 53
5.2.5 Eriks Industrial Services 54
5.2.6 Brammer plc 55
5.2.7 Toolbank 58
5.2.8 Toolstation 59
5.2.9 Parker Merchanting 60
5.2.10 Machine Mart 61
5.2.11 Monks and Crane 62
5.2.12 Hayley 63
5.2.13 Seton 64
5.2.14 Other Key Distributors 65
6. PRODUCT SECTORS OF THE UK INDUSTRIAL CONSUMABLES DISTRIBUTION MARKET 68
6.1 DEFINITION 68
6.2 PRODUCT MIX 69
6.3 PRODUCT SECTORS 70
6.3.1 Health and Safety 70
6.3.2 Engineering and Metal Working 73
6.3.3 Fluid and Air Control Products 76
6.3.4 Workshop and Maintenance Products 79
6.3.5 Power Tools 83
6.3.6 Hand Tools 85
6.3.7 Storage, Security, Access, Site and Handling Equipment (SSASH) 87
6.3.8 Fasteners 91
6.3.9 Janitorial Products 94
6.3.10 Abrasive Products 96
6.3.11 Other Products 99
CHART 1 UK INDUSTRIAL CONSUMABLE PRODUCTS DISTRIBUTION MARKET (£M) AT DISTRIBUTORS PRICES 2008-2018 10
TABLE 2 GDP DATA - 2011-2014 - KEY CONSTITUENT ELEMENTS 15
CHART 3 INTEREST RATES AND INFLATION (CPI) FROM 1994-2018 17
CHART 4 PDI and SAVINGS RATIO AT CURRENT PRICES 1995-2018 18
TABLE 5 EXCHANGE RATE FLUCTUATIONS 2009-2015 - STERLING TO THE DOLLAR, AND THE EURO, SPOT RATES 20
CHART 6 DISTRIBUTION STRUCTURE OF INDUSTRIAL PRODUCTS 24
CHART 7 DISTRIBUTION MIX OF PRODUCTS SUPPLIED BY INDUSTRIAL DISTRIBUTORS AND SPECIALIST DISTRIBUTORS - % SHARE BY VALUE 28
TABLE 8 INDUSTRIAL CONSUMABLE PRODUCTS DISTRIBUTION MARKET 2008 - 2018 (£M) AT DISTRIBUTORS SELLING PRICES (DSP) 29
CHART 9 OUTPUT OF THE PRODUCTION INDUSTRIES INDEX 2009-2014 (2011= 100) 37
CHART 10 AUTOMOTIVE MANUFACTURING PLANTS - REGIONAL CONCENTRATION (%) 38
CHART 11 INFRASTRUCTURE OUTPUT (NEW WORK) BY SECTOR - ROADS, RAIL, WATER, ELECTRICITY ETC. GREAT BRITAIN 2013 - % BY VALUE 41
CHART 12 VALUE OF ROAD and RAIL CONSTRUCTION OUTPUT 2007-2013 (£ BILLION) 42
CHART 13 UTILITIES CONSTRUCTION OUTPUT GB BY SECTOR WATER, SEWERAGE, ELECTRICITY ETC, 2007 TO 2013 - BY VALUE (£M AT CURRENT PRICES) 43
TABLE 14 UK RENEWABLE ENERGY GENERATION 2009-13 - BY OUTPUT (GWH) 44
TABLE 15 UK INDUSTRIAL CONSUMABLE PRODUCTS DISTRIBUTORS - MARKET SHARES BY % VALUE 2014 47
TABLE 16 ARCO PRODUCT PORTFOLIO - % SHARE BY PRODUCT SECTOR, 2014 49
TABLE 17 SCREWFIX'S PRODUCT PORTFOLIO - % SHARE BY PRODUCT SECTOR, 2014 51
TABLE 18 RS COMPONENTS PRODUCT PORTFOLIO - % SHARE BY PRODUCT SECTOR, 2014 52
TABLE 19 CROMWELL TOOLS PRODUCT PORTFOLIO - % SHARE BY PRODUCT SECTOR, 2014 53
TABLE 20 ERIKS PRODUCT PORTFOLIO - % SHARE BY PRODUCT SECTOR, 2014 55
TABLE 21 BRAMMER'S PRODUCT PORTFOLIO - % SHARE BY PRODUCT SECTOR, 2014 56
TABLE 22 BUCK and HICKMAN PRODUCT PORTFOLIO - % SHARE BY PRODUCT SECTOR 2014 57
TABLE 23 TOOLBANK PRODUCT PORTFOLIO - % SHARE BY PRODUCT SECTOR, 2014 58
TABLE 24 TOOLSTATION PRODUCT PORTFOLIO - % SHARE BY PRODUCT SECTOR, 2014 59
TABLE 25 PARKER MERCHANTING PRODUCT PORTFOLIO - % SHARE BY PRODUCT SECTOR, 2014 60
TABLE 26 MACHINE MART PRODUCT PORTFOLIO - % SHARE BY PRODUCT SECTOR, 2014 61
TABLE 27 MONKS and CRANE PRODUCT PORTFOLIO - % SHARE BY PRODUCT SECTOR, 2014 62
TABLE 28 HAYLEY GROUP PRODUCT PORTFOLIO - % SHARE BY PRODUCT SECTOR, 2014 63
TABLE 29 SETON PRODUCT PORTFOLIO - % SHARE BY PRODUCT SECTOR, 2014 64
TABLE 30 PRODUCT PORTFOLIOS OF KEY INDUSTRIAL EQUIPMENT, MSC INDUSTRIAL SUPPLY, FWB PRODUCTS AND AXMINSTER TOOL CENTRE - % SHARE BY PRODUCT SECTOR, 2014 66
TABLE 31 PRODUCT MIX OF THE UK INDUSTRIAL PRODUCTS DISTRIBUTION MARKET VALUE AND SHARE 2014 AT DISTRIBUTORS SELLING PRICES (DSP) 69
CHART 32 ESTIMATED % MIX OF DISTRIBUTION CHANNELS FOR HEALTH AND SAFETY PRODUCTS BY VALUE, IN 2014 AT DSP 71
TABLE 33 COMPANY DISTRIBUTION SHARES OF HEALTH and SAFETY PRODUCTS WITHIN THE INDUSTRIAL PRODUCTS DISTRIBUTION MARKET IN 2014 72
CHART 34 ESTIMATED % MIX OF DISTRIBUTION CHANNELS FOR ENGINEERING AND METAL WORKING PRODUCTS BY VALUE, IN 2014 AT DSP 74
TABLE 35 COMPANY DISTRIBUTION SHARES OF ENGINEERING AND METAL WORKING PRODUCTS WITHIN THE INDUSTRIAL PRODUCTS DISTRIBUTION MARKET IN 2014 75
CHART 36 ESTIMATED % MIX OF DISTRIBUTION CHANNELS FOR AIR AND FLUID CONTROL PRODUCTS BY VALUE, IN 2014 AT DSP 78
TABLE 37 COMPANY DISTRIBUTION SHARES OF FLUID AND AIR CONTROL PRODUCTS WITHIN THE INDUSTRIAL PRODUCTS DISTRIBUTION MARKET IN 2014 79
CHART 38 ESTIMATED % MIX OF DISTRIBUTION CHANNELS FOR WORKSHOP AND MAINTENANCE PRODUCTS IN THE INDUSTRIAL SECTOR, BY VALUE, IN 2014 AT DSP 81
TABLE 39 COMPANY DISTRIBUTION SHARES OF WORKSHOP AND MAINTENANCE PRODUCTS WITHIN THE INDUSTRIAL PRODUCTS DISTRIBUTION MARKET IN 2014 82
CHART 40 ESTIMATED % MIX OF DISTRIBUTION CHANNELS FOR POWER TOOLS IN 2014 AT DSP 84
TABLE 41 COMPANY DISTRIBUTION SHARES OF POWER TOOLS WITHIN THE INDUSTRIAL PRODUCTS DISTRIBUTION MARKET IN 2014 85
CHART 42 ESTIMATED % MIX OF DISTRIBUTION CHANNELS FOR HAND TOOLS PRODUCTS BY VALUE, IN 2014 AT DSP 86
TABLE 43 COMPANY DISTRIBUTION SHARES OF HAND TOOLS WITHIN THE INDUSTRIAL PRODUCTS DISTRIBUTION MARKET IN 2014 87
CHART 44 ESTIMATED % MIX OF DISTRIBUTION CHANNELS FOR STORAGE, SECURITY, ACCESS, SITE AND HANDLING EQUIPMENT, BY VALUE, IN 2014 AT DSP 89
TABLE 45 COMPANY DISTRIBUTION SHARES OF SSASH PRODUCTS WITHIN THE INDUSTRIAL PRODUCTS DISTRIBUTION MARKET IN 2014 90
CHART 46 ESTIMATED % MIX OF DISTRIBUTION CHANNELS FOR FASTENER PRODUCTS BY VALUE IN 2014 AT DSP 92
TABLE 47 COMPANY DISTRIBUTION SHARES OF FASTENERS WITHIN THE INDUSTRIAL PRODUCTS DISTRIBUTION MARKET IN 2014 93
CHART 48 ESTIMATED % MIX OF DISTRIBUTION CHANNELS FOR JANITORIAL PRODUCTS BY VALUE IN 2014 AT DSP 95
TABLE 49 COMPANY DISTRIBUTION SHARES OF JANITORIAL PRODUCTS WITHIN THE INDUSTRIAL PRODUCTS DISTRIBUTION MARKET IN 2014 96
CHART 50 ESTIMATED % MIX OF DISTRIBUTION CHANNELS FOR ABRASIVES PRODUCTS BY VALUE IN 2014 AT DSP 98
TABLE 51 COMPANY DISTRIBUTION SHARES OF ABRASIVES WITHIN THE INDUSTRIAL PRODUCTS DISTRIBUTION MARKET IN 2014 99

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