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| AM45132 |
| AMA DOMESTIC CONSERVATORY MARKET JULY 2002 |
| Overview |
This report covers:
Companies covered include:

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| AMA Research have published the Seventh Edition of the 'UK Domestic Conservatory Market Report 2002' - incorporating original input and primary research, it represents an up-to-date and comprehensive review of the Conservatory market. |
| The report reviews the Conservatory market in domestic applications, which is now worth over £1 billion at retail prices, with annual volumes continuing to rise reflecting its widespread appeal. However, the market value increases up to £1.7 billion when installation costs, furniture, lighting, flooring, window coverings and other accessories are included. |
| Key issues reviewed:- |
| MARKET SIZE - Volumes, Values, Trends, Forecasts. |
| PRODUCT MIX - Styles/Designs, Custom-made |
| FRAME MATERIALS - Share by PVCu, Aluminium, Timber - Trends, Forecasts. |
| SUPPLY & DISTRIBUTION - Key Suppliers, Shares, Channel Shares. |
| Compiled by marketing professionals with experience of the Conservatory market, our report answers the need for both a comprehensive review of market developments and a detailed analysis of influencing factors and possible future trends. |
| Key Areas Of Interest:-· Buoyant market performance.· Material usage by sector - the rise of PVCu as the leading frame material.· Market prospects - future growth, saturation levels - how far can it grow?· Estimated £1.7 billion market when blinds, tiles, furniture, lighting etc. all included |
| Key areas of coverage in the report include:- |
| MARKET |
| Market size by VALUE - market developments from 1985-2005, analysis and forecast of market trends and speed of market growth. |
| Conservatory market by VOLUME - rapid growth in mid-late 1990s, market conditions from 1999-2001 & future prospects to 2005 etc. - factors influencing future developments. |
| Market sizes by product and material usage - changing mix between PVCu, Timber & Aluminum, strengths and weaknesses of different product/market sectors. |
| Future prospects for material usage up to 2005. |
| Market penetration levels - current household ownership levels and future developments - saturation levels and limiting factors on long term growth. |
| Custom-made/standard size models - market share and recent trends. |
| Analysis of overall market developments - growth rates, materials, component supplies (roof systems etc.) design changes - changes in recent years/future trends. |
| Analysis of conservatory accessories including flooring, window coverings, underfloor heating etc. - overall market size and trends. |
| DISTRIBUTION AND SUPPLY |
| Channels of Distribution - Sales of products by channels of distribution (DIY Outlets, Garden Centres, Direct Sell Companies, Specialists, Builders etc. - Areas of specialisation, major changes in recent years. Comparison of 1990/1997/1999/2001. |
| Growth of new build as a market sector - recent trends, longer term potential. |
| Mix of material usage by distribution channels - analysis of major changes. |
| Distribution structure for PVCu, Aluminum & Timber Conservatories - major differences between material. |
| Distribution Channel Share - by Volume and value. |
| Future prospects for major channels - including analysis of radical changes in market structure in recent years - growth of Direct Sell etc. |
| Major suppliers - market shares, product positioning, specialisation, shares within market sectors, areas of growth/decline - strengths and weaknesses. |
| Analysis of price levels and promotional expenditure - recent and future trends. |
| GENERAL & FUTURE PROSPECTS |
| Comparison of market size, growth rates and household penetration levels (1990-2001) of Conservatories, Replacement Windows, Fitted Kitchens, Showers and Central Heating - comparisons between new and mature markets. |
| Review of socio-economic factors influencing the market - growth in disposable income, age distribution of population, housing trends etc. |
| First published in1990, this report is the Seventh Edition and provides a comprehensive review of recent market developments in the Conservatory market with forecasts of future developments and a review of key influencing factors |
| Sales of conservatories have increased substantially over the last 5 years and represent the best performing sector of any major consumer durable. Consumer awareness and interest in the product is very high, with most householder surveys indicating conservatories high up on the list of preferred home improvements. |
| Since the early-1990s, market volumes have continued to grow, to an estimated level of 178,000 units in 2001 and are forecast to show further growth to 225,000 units by 2005, though annual rates of growth should begin to slow down. |
| Prospects for the conservatory market in 2002 remain relatively optimistic. Despite the threat of a recession, consumer confidence has remained buoyant as a result of low interest rates, rising real incomes and increasing house prices. In the longer term, volume growth is predicted to slow as the market matures and the level of potential conservatory applications decline. |
| New housing currently represents a small sector of demand for conservatories, but volumes could grow as developers appreciate the marketing and cost benefits of including a conservatory within the original specification. However, a major long-term restriction is the increasing proportion of 1-2 person households which is likely to result in an increased demand for smaller homes, such as flats, maisonettes etc. At present, single person households account for around a third of the population. However, the high divorce rate and the proportion of couples delaying starting a family is expected to rise, fuelling the demand for smaller dwellings. |
| PVCu remains the dominant frame material for conservatories with an estimated current share of 78 percent. Timber has maintained a steady share of the market of around 21 percent in recent years, with aluminium experiencing a steady decline and now only accounts for around 1 percent of installations. |
| However, PVCu's share has now levelled out and will have to erode timber sales if further share gains are to be achieved. Timber is still preferred by many homeowners, with DIY Multiples, Garden Centres and Specialists all widely offering the material. |
| Replacement window companies are now the major distribution channel for conservatories, accounting for an estimated 66 percent of sales, though share is very fragmented between a large number of retail operations. |
| The DIY Multiples account for an estimated volume share of 19 percent, but virtually all sales are concentrated through Wickes and B&Q. The high level of price competition in the DIY sector, and the greater focus on higher quality products has resulted in some loss of value share for this sector in recent years. |
| Garden Centres and Portable Building specialists have continued to see share eroded and now account for around 8 percent of sales, compared to over 30 percent in the early-1990s. Conservatory specialists, such as Amdega, and builders account for the remaining 7 percent of the market, though share by value would be high given their much higher average retail prices. |
| In overall terms, the supply structure is still very fragmented due to the range of alternative frame materials and distribution channels. While Anglian and Everest are leading brand names in the replacement window market, the sector is dominated by 2000+ companies each typically installing a small volume of conservatories. |
| BHD are the leading supplier overall due to their strong supply links with Wickes and their Houseproud Conservatories subsidiary supplying into other channels. Amdega, David Salisbury and Portland are the dominant suppliers in the high value specialist sector of the market, with Amdega a particularly strong conservatory brand. |
| Overall, the prospects for the conservatory market are favourable, providing the economy remains strong and consumer confidence levels are high. The appeal of conservatories remains high as a desirable lifestyle product for many homeowners. In the medium term, with potential for growth in household ownership levels, annual volumes and values should remain buoyant, though the growth rates experienced in the last 5 years will inevitably slow down as the market approaches maturity. |
| The UK Domestic Conservatory Market 2002 - Contents | ||
| 1 | INTRODUCTION | 4 |
| 2 | SUMMARY | 6 |
| 3 | ECONOMIC ENVIRONMENT | 9 |
| 3.1 | GENERAL | 9 |
| 3.2 | GDP | 9 |
| 3.3 | INFLATION & INTEREST RATES | 10 |
| 3.4 | UNEMPLOYMENT & CONSUMER SPENDING | 11 |
| 3.5 | HOUSING & CONSTRUCTION | 11 |
| 3.6 | STERLING | 12 |
| 3.7 | CONCLUSION | 12 |
| 4 | MARKET STRUCTURE | 13 |
| 4.1 | MARKET DEFINITION | 13 |
| 4.2 | MARKET SIZE | 13 |
| 4.2.1 | Background | 13 |
| 4.2.2 | Current Trends & Future Growth | 15 |
| 4.3 | MARKET VOLUMES | 17 |
| 4.3.1 | Background | 17 |
| 4.3.2 | Current Situation & Future Growth | 19 |
| 4.4 | HOUSEHOLD OWNERSHIP LEVELS | 21 |
| 5 | PRODUCTS | 26 |
| 5.1 | FRAME MATERIALS | 26 |
| 5.2 | DESIGNS | 30 |
| 5.2.1 | Customised/Standard Designs | 30 |
| 5.2.2 | Conservatory Designs | 32 |
| 5.2.3 | Single/Double Glazed Models | 34 |
| 5.2.4 | Roof Systems | 35 |
| 5.3 | OTHER RELATED PRODUCTS | 36 |
| 5.3.1 | Floorcoverings | 36 |
| 5.3.2 | Heating Systems | 39 |
| 5.3.3 | Window Coverings | 40 |
| 6 | SUPPLIERS | 42 |
| 7 | CHANNELS OF DISTRIBUTION | 49 |
| 8 | KEY MARKET INFLUENCES | 60 |
| 8.1 | HOUSE-MOVING LEVELS | 63 |
| 8.2 | HOUSING STOCK | 64 |
| 8.3 | INTEREST RATES AND INFLATION | 66 |
| 8.4 | PERSONAL DISPOSABLE INCOME AND SAVINGS RATIO | 67 |
| 8.5 | EMPLOYMENT/UNEMPLOYMENT | 69 |
| 8.6 | POPULATION PROFILE | 70 |
| 9 | FUTURE PROSPECTS | 72 |
| TABLES & CHARTS | ||
| CHART 1 | THE UK DOMESTIC CONSERVATORY MARKET 1995-2005 BY VOLUME | 6 |
| TABLE 2 | GDP percentAGE CHANGE PER ANNUM 1980-2004 | 10 |
| TABLE 3 | DOMESTIC CONSERVATORY MARKET 1990-2001 (£M RSP) | 14 |
| TABLE 4 | DOMESTIC CONSERVATORY MARKET 2000-2005 (£M RSP) | 16 |
| TABLE 5 | UK DOMESTIC CONSERVATORY MARKET 1990-2001 BY VOLUME | 18 |
| TABLE 6 | UK DOMESTIC CONSERVATORY MARKET 2001-2005 BY VOLUME | 19 |
| CHART 7 | HOUSEHOLD OWNERSHIP OF CONSERVATORIES 1990-2001 | 22 |
| TABLE 8 | COMPARISON OF HOUSEHOLD OWNERSHIP LEVELS OF A RANGE OF CONSUMER DURABLES 1990-2000 | 24 |
| TABLE 9 | FRAME MATERIAL USAGE 1989-2001 | 27 |
| CHART 10 | FRAME MATERIAL USAGE 1985-2005 | 29 |
| CHART 11 | MIX OF CUSTOMISED/STANDARD SIZE MODELS 2001 BY VOLUME | 31 |
| CHART 12 | LEAN-TO/VICTORIAN DESIGNS - 2001 BY VOLUME | 33 |
| TABLE 13 | FLOORCOVERINGS MARKET PRODUCT MIX 2000 | 36 |
| TABLE 14 | CONSERVATORY MARKET 2001 SHARE BY VOLUMES | 43 |
| TABLE 15 | CHANNELS OF DISTRIBUTION FOR CONSERVATORIES 1990 - 2001 SHARE BY VOLUME | 50 |
| CHART 16 | CHANNELS OF DISTRIBUTION - 2001 SHARE BY VALUE | 54 |
| CHART 17 | DISTRIBUTION OF TIMBER CONSERVATORIES | 57 |
| CHART 18 | DISTRIBUTION OF PVC-U CONSERVATORIES | 58 |
| TABLE 20 | SUMMARY OF MAJOR DISTRIBUTION CHANNELS BY MATERIAL | 59 |
| TABLE 21 | NEW HOUSING COMPLETIONS 1990-2003 GREAT BRITAIN ('000) | 60 |
| TABLE 22 | HOUSING STARTS 1993-2002 GREAT BRITAIN ('000) | 61 |
| CHART 23 | VALUE OF NEW UK HOUSING OUTPUT AND RMI OUTPUT (£M) | 62 |
| TABLE 24 | NUMBER OF PROPERTY TRANSACTIONS IN ENGLAND AND WALES 1994-2002 | 64 |
| TABLE 25 | STOCK OF DWELLINGS IN GREAT BRITAIN 1971-2000 | 65 |
| CHART 26 | INTEREST RATES AND INFLATION (RPI) FROM 1990-2003 | 66 |
| CHART 27 | PDI & SAVINGS RATIO | 68 |
| CHART 28 | NUMBER OF EMPLOYEES IN EMPLOYMENT GB - JUNE 1981-01 (MILLIONS) | 69 |
| CHART 29 | AGE DISTRIBUTION OF THE RESIDENT UK POPULATION 1998 ('000) | 70 |
Text © 2002 AMA Research
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Last updated by Duncan Nottage 5th January 2003