Table of Contents

Executive Summary

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TABLE OF CONTENTS

1. INTRODUCTION 5

2. SUMMARY 6

3. ECONOMIC ENVIRONMENT 9

3.1 INTRODUCTION 9

3.2 GROWTH AND INTEREST RATES 10

3.3 BUILDING & CONSTRUCTION 10

3.4 CONCLUSION 11

4. THE MARKET 12

4.1 THE LIGHTING MARKET 12

4.2 LAMPS/BULBS 21

4.3 LUMINAIRES/FITTINGS 36

4.4 IMPORTS/EXPORTS 50

5. CHANNELS OF DISTRIBUTION 57

5.1 DOMESTIC MARKET 57

5.2 NON-DOMESTIC MARKET 69

6. SUPPLIERS 79

6.1 DOMESTIC MARKET 79

6.2 NON-DOMESTIC MARKET 88

7. KEY MARKET INFLUENCES 97

7.1 THE HOUSING MARKET 97

7.2 COMMERCIAL CONSTRUCTION 101

7.3 POPULATION PROFILE 104

7.4 EMPLOYMENT/UNEMPLOYMENT 107

7.5 INTEREST RATES 108

8. FUTURE PROSPECTS 112

8.1 GENERAL 112

8.2 LAMPS 113

8.3 LUMINAIRES 113

TABLES AND CHARTS

CHART 1: THE UK LIGHTING MARKET 1990-2000 £M MSP

TABLE 2: UK LIGHTING MARKET 1990-2000 (£M MSP)

CHART 3: THE UK MARKET FOR LIGHTING 1990 - 2000 (£M MSP)

TABLE 4: UK LIGHTING MARKET 1995-2002 (£M)

CHART 5: UK LAMPS & LUMINAIRES MARKET 1997

TABLE 6: THE UK LAMPS MARKET 1990-2000 £M MSP

CHART 7: UK LAMPS MARKET - DOMESTIC & NON DOMESTIC SECTORS 1997 BY VALUE

CHART 8: UK DOMESTIC LAMP MARKET NEW & REPLACEMENT APPLIANCES 1997

CHART 9: DOMESTIC LAMPS - PRODUCT MIX VOLUME & VALUE SALES 1991 & 1997 - percent

TABLE 10: UK LUMINAIRES MARKET 1990-2000 £M MSP

CHART 11: UK LUMINAIRES MARKET DOMESTIC & NON DOMESTIC (VALUE 1997)

TABLE 12: UK DOMESTIC LUMINAIRES MARKET BY PRODUCT TYPE SHARE BY VALUE £M RSP 1995 & 1997

TABLE 13: VALUE OF CONSTRUCTION OUTPUT GREAT BRITAIN - 1990-1997 (£BN)

TABLE 14: UK CONSTRUCTION ORDERS FOR NEW WORK 1990-1997 (£BN)

TABLE 16: UK IMPORTS & EXPORTS OF LAMPS - BY VALUE £M 1996 & 1997

TABLE 17: UK IMPORTS OF LAMPS BY COUNTRY 1996-1997 £M MSP

TABLE 18: IMPORTS & EXPORTS OF LIGHT FITTINGS FOR THE UK BY VALUE 1996 & 1997 £M

TABLE 19: UK IMPORTS OF LIGHT FITTINGS BY COUNTRY OF ORIGIN 1996 & 1997

TABLE 20: RETAIL SALES OF LAMPS & LUMINAIRES BY CHANNEL OF DISTRIBUTION 1997 SHARE BY VALUE

TABLE 21: NON DOMESTIC SALES OF LAMPS & LUMINARIES BY CHANNEL OF DISTRIBUTION 1997 BY VALUE

TABLE 22: MIX OF PRODUCT SALES THROUGH ELECTRICAL WHOLESALERS - 1996

CHART 23: ELECTRICAL WHOLESALERS MARKET SHARE 1997 BY VALUE

CHART 24: SALES OF DOMESTIC LAMPS 1997 MANUFACTURERS MARKET SHARE BY VALUE ( percent)

TABLE 25: NON DOMESTIC LAMPS & LUMINAIRES MANUFACTURERS MARKET SHARE BY VALUE 1997

TABLE 26: HOUSING COMPLETIONS 1990-1997 GREAT BRITAIN ('000)

TABLE 27: HOUSING STARTS 1993-1997 GREAT BRITAIN ('000)

TABLE 28: VALUE OF NEW UK HOUSING OUTPUT AND RMI OUTPUT (£M)

TABLE 29: NUMBER OF PROPERTY TRANSACTIONS IN ENGLAND AND WALES 1990-1996

TABLE 30: CONTRACTORS OUTPUT - NEW WORK AND RMI NON HOUSING - CURRENT PRICES (£M)

TABLE 31: NEW ORDERS OBTAINED BY CONTRACTORS 1990-1997 CURRENT PRICES

TABLE 32: AGE DISTRIBUTION OF RESIDENT POPULATION - JUNE 1995

CHART 33: NUMBER OF EMPLOYEES IN EMPLOYMENT GB - JUNE 1981-96 (MILLIONS)

CHART 34: INTEREST RATES AND INFLATION (RPI) FROM 1990-2000

CHART 35: PDI & SAVINGS RATIO TABLE 36: STOCK OF DWELLINGS GREAT BRITAIN - 1983-1997

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EXECUTIVE SUMMARY

After experiencing several difficult years in the early-1990s, the total lighting market has experienced stronger recovery in the last two years and is estimated to be worth nearly £1.1 billion in 1997.

The domestic market has been particularly buoyant in 1996/97, with luminaires benefiting from current high levels of consumer spending and general interest in home decor. The non-domestic sector has been less buoyant but is now beginning to benefit from the sustained recovery in commercial construction and Millennium projects.

The lamps market is valued at around £330 million and has experienced low growth over the last few years. The sector has benefited from a general move towards higher value products, such as CFLs and halogen bulbs, but market growth has been negatively impacted by intense price competition, particularly for standard GLS bulbs.

GLS bulbs still dominate the domestic lamp market although they have experienced some decline in volume terms. Fluorescent lamps now take over 10 percent of the market in volume terms, but considerably more in value with the remainder accounted for by halogen lamps. Both halogen and compact fluorescents are experiencing some growth in the domestic sector. In addition, requirements for brighter lighting, long-life and low replacement frequency have contributed to their growth in the non-domestic sector.

The luminaires market is estimated to be worth around £750 million. This market has experienced higher levels of growth during 1996/97 primarily as a result of strong domestic demand. However, the slow recovery in commercial construction has dampened overall market growth. Other positive influences on this market include the development of niche sectors, high levels of new product development, EC legislation, increased attention to design in both commercial and domestic applications and a trend to more customised lighting.

Around 35 percent of the luminaires market is in the domestic sector and 65 percent in the commercial sector. The largest product sectors in the domestic market are lamp shades and table lamps which account for 55 percent in value terms. Growth sectors include table lamps and spotlights which have both benefited from a change in consumer philosophy towards lighting offering flexibility and a more subtle ambience. As a result, central light sources, such as wall and ceiling lights, have experienced significant decline.

The other sector which has experienced substantial growth in recent years is security/external lighting which is benefiting from new build applications and first-time installations of alarms.

The non-domestic market has benefited significantly in recent years from legislation introduced to enhance working conditions for employees. This includes legislation regarding VDU lighting and emergency lighting which has resulted in many companies undertaking major refurbishment.

A key area of development in recent years is the use of more sophisticated management systems to offer flexibility and variable control over heating, ventilation and lighting within a commercial/industrial/retail environment, which is forecast to continue in the future.

Imports represent a strong and growing sector of the market. While production of lamps is concentrated in the hands of major global suppliers, luminaires represent a major source of imports, with the current strength of Sterling leading to growing import penetration.

Major retail outlets for the sale of lamps are Grocery Multiples, DIY outlets and Woolworths. In terms of luminaires, major channels are DIY Multiples, Lighting Specialists, BHS and other Department stores/High Street Multiples. It is estimated that nearly 85 percent of non-domestic lamps and luminaires are distributed through wholesalers and distributors, with the rest distributed by direct supply and DIY outlets.

In terms of the supply of domestic lamps, there are four companies which dominate this market - Philips, GE, Ring and Osram with own brand also significant. Other suppliers include SLI, Lampways and Crompton. With regard to luminaires, major suppliers are Ring, Emess, etc. Major suppliers of lamps and luminaires to the non-domestic sector are TLG, Philips, GE, Osram, Emess and Whitecroft.

This comprehensive report represents a detailed assessment of the market, reviewing major trends, key factors influencing developments and future prospects for the sector. Analysis is both quantitative and qualitative, based on our substantial experience of the building and home improvement markets.

Text © 1998 AMA Research

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