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| AM45138 |
| AMA DOMESTIC CONSERVATORY MARKET APRIL 1998 |
| Overview |
This report covers:
Companies covered include:

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The performance of the Conservatory market in 1996/97 compares very favourably with any consumer durable over the last 2/3 years. In fact, a longer term perspective over the last decade illustrates that few products have weathered the effects of the recession in the early-1990s so successfully, particularly in view of their high unit value.
As a result, market volumes have continued to grow to an estimated level of 112,000 units in 1997 and forecast to show further growth to over 120,000 units by the new Millennium.
Underlying prospects for the market in 1998 are relatively optimistic. A benign economic climate over the last 2/3 years of relatively low inflation, rising real incomes and increasing house prices is feeding through into an improvement in the market in general. Even the impact of rising interest rates in 1997 has not had a serious impact on the conservatory market, having been offset by the windfall gains from Building Society and Insurance Company demutualisations.
In terms of frame material usage, PVC-U has continued to increase at the expense of aluminium. Timber is retaining a relatively consistent share at around 20 percent. However, PVC-U has now virtually reached saturation point and is expected to level off as timber and aluminium retain some share of the market.
Replacement window companies are the major suppliers and have continued to increase share to a current level of over 60 percent. This share is highly fragmented and underpinned by the combined marketing support of 2000+ companies active in this sector. DIY Multiples constitute the second largest channel with Wickes particularly dominant supplying to local builders or more enthusiastic DIY householders.
The major loss of share has been through the Garden Centres and Portable Building sites. In 1990 this channel enjoyed a share of around 33 percent, but by 1997 was accounting for less than 10 percent share. Conservatory specialists account for around 3 percent share by volume, though value share is higher reflecting their high average unit price.
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.
In overall terms, the supply structure remains highly fragmented due to the range of alternative frame materials and distribution channels. While Anglian and Everest are strong in the replacement window market, the sector is dominated by 2000+ companies each typically installing a small volume of conservatories. British Home Doors are the dominant supplier overall due to their strong supply links with Wickes and the growth of Houseproud Conservatories supplying into other channels. Amdega and Portland are the dominant suppliers in the high value specialist sector of the market.
Conservatories remain a desirable 'lifestyle' product for many homeowners. Awareness of the benefits are high and improving incomes should contribute to further growth in the medium term. While cost is a limiting factor to growth, the key restricting factor in the longer term will be space and style of house, but growth should be sustained in the medium term before market saturation levels becomes a critical issue.
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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Last updated by Duncan Nottage 5th March 1999