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The Portable Power Tool market is a very concentrated and competitive sector. Over the past few years it has been going through a difficult period due mostly to the adverse economic climate at the beginning of the 1990s and, more specifically, the deterioration of the housing market and the level of activity within the building industry.
The total market in 1996 is estimated at £151m at manufacturers' prices, which represents a marginal increase of around 2 percent over the previous year, though sales have been more buoyant in 1997.
The DIY sector represents around 57 percent of the market and over the period 1993 - 96 it has seen some signs of recovery following a difficult period, growing by around 10 percent. This growth can be mainly attributed to the emergence of new products, particularly cordless power tools, that have helped boost sales. Over the next four years the DIY sector is forecast to continue to grow steadily at a rate of around 2 percent per annum as the economy recovers and new cordless products are launched on the market to sustain demand.
Professional Portable Power Tools represent 43 percent of the total market and this sector has been very stagnant over the past three years as construction activity has not significantly recovered from the depressed levels of the early 1990s. This sector is expected to grow very slowly over the next few years as housing volumes recover and commercial new building activity begins to increase.
The largest segment in the DIY sector is Drills, accounting for around 40 percent of manufacturers' sales, followed by Screwdrivers, Sanders, Saws and Wallpaper & Paint Strippers. The remaining £10m is accounted for by other tools such as Angle Grinders, Planers, Routers, Sprayguns, Electric Glue Guns and Electric Tackers. The fastest growing areas have proved to be cordless drills and screwdrivers with growth forecast for sanders and saws, reflecting growing consumer demand for woodworking tools.
Within the Professional sector, Cutting & Grinding is the largest segment accounting for over 40 percent of sales, followed by Drilling & Breaking and Carpentry & Woodworking. As the Professional sector has proved to be very static since 1993 no dramatic changes have occurred or are expected in any of these particular segments.
The Portable Power Tool Industry is a very concentrated market with only a few suppliers accounting for the major bulk of sales. This is particularly valid for the DIY sector which is dominated by two major manufacturers: Black & Decker and Bosch, together accounting for around 90 percent of the DIY sales. With reference to the Professional sector, five suppliers share over 90 percent of the market with Bosch being the leader.
Although there is an increasing "blur" in the distribution of DIY and Professional Power Tools as some Professional brands can be found in DIY superstores and in mail order catalogues, the distribution channels generally remain quite distinct for each sector.
In the DIY sector, Specialist Distributors / Wholesalers remain the biggest channel with 40 percent of manufactures' sales, followed by DIY Multiples who account for an estimated 30 percent. The remaining share being split between Catalogue Showrooms (mainly Argos), Independent Retailers, Mail Order and Department Stores. DIY Multiples are expected to further increase their share at the expense of Distributors / Wholesalers as they increasingly buy directly from manufacturers to maintain their competitiveness.
In the Professional sector a much more direct selling approach is applied and Power Tool Servicing Dealers are the biggest channel with an estimated 40 percent share of manufacturers' sales, followed by Hire Outlets with 25 percent. The remaining being shared among other channels such as Builders / Plumbers Merchants, Specialist Distributors / Wholesalers, DIY Multiples and Electrical Wholesalers. No major changes in the distribution pattern of Professional Tools have occurred in recent years, though Hire outlets are a growing sector for more specialised tools and a focus for new product developments.
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 © 1997 AMA Research
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Last updated by Duncan Nottage 5th March 1999