| AM51004 |
| AMA Research UK Building and Home Improvements UK October 2004 |
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This report covers: building and home improvements, DIY multiples, builders & plumbers merchants, independent hardware & DIY Stores, decorative products, bathroom products, garden products, hardware, tools, fixings, electrical, lighting, heavyside materials, bricks, blocks and concrete, cement & plaster timbe, glazing, heating, plumbing, drainage
BRIEF DESCRIPTION
| This report provides a review of the overall UK building products sector, focusing on Builders Merchants, DIY Multiples and Independent Hardware channels in terms of their historic and forecast size. Covering the period 1998-2007, it examines the economic background, distribution structure, future prospects and for each product sector it reviews the market size, product mix and distribution. |
| Key areas covered in the report:- |
| Building and home improvement products market |
| Total market size since 1996 and forecast to 2007. |
| Key market trends and influences impacting on the overall market. |
| Mix of 8 key product sectors by value in 2003. |
| Review of changes in share between sectors since 1999 and forecasts to 2007. |
| UK Construction Industry |
| UK construction output – Housing and non-housing activity by value. |
| Non housing, new work and RMI construction activity by sector. |
| Value of new UK Housing and RMI output 1995-2004. |
| Future prospects for UK construction activity. |
| DISTRIBUTION STRUCTURE |
| Key trends in the Distribution of Building and Home Improvement Products. |
| Share by value of the major channels in the market in 2003. |
| Major Restructuring by key distributors in recent years. |
| DIY Multiples market – overall value, product mix, product share change 1999-2007, total DIY expenditure 1997-2003, UK & European DIY multiples – sales and outlets, DIY multiples’ market shares in 2003, detailed information on each key retailer. Product mix for each major DIY Multiple. |
| Builders and Plumbers Merchants Market –overall value, product mix, detailed information on major merchants, shares etc. |
| Independent Hardware & DIY Stores – key trends, leading retailer shares, company activity, leading wholesalers share by value. |
| Other channels include Electrical Wholesalers, Garden Centres, specialist distributors etc. |
| Product review |
| Value of the key products from 1999 - 2004 and their relative importance in the overall market. |
| Share taken by DIY Multiples, Merchants, Independents and others for each key product sector in 2003. |
| Analysis and comment on market size and trends from 1999 - 2004 on Decorative, Bathroom, Garden, Hardware, Electrical / Lighting, Kitchens, Adhesives / Sealants, ‘Heavyside’ materials (bricks etc, cement / plaster, timber / doors, heating, plumbing, drainage). |
| Product mix in 2003 for Decorative, Bathroom, Garden, Hardware, Electrical / Lighting, Kitchens, Adhesives / Sealants, ‘Heavyside’ materials (bricks etc, cement / plaster, timber / doors, heating, plumbing, drainage). |
| Distribution shares and trends for Decorative, Bathroom, Garden, Hardware etc, Electrical / Lighting, Kitchens, Adhesives / Sealants, ‘Heavyside’ materials (bricks etc, cement / plaster, timber / doors, heating, plumbing, drainage). |
| FUTURE PROSPECTS |
| Impact of UK economy on construction – interest rates, housing and non-housing sectors etc. |
| Possible future scenarios for changes in distribution structure. |
| Future prospects in terms of pricing pressures, changing procurement trends. |
EXECUTIVE SUMMARY
| The UK Building and Home Improvement Products market comprises of a vast range of products, routes to market and end use application areas. In 2003, this market is estimated to be worth some £37.3 billion at retailers / merchants selling prices. Overall, since 1999, it is estimated that the market has experienced an increase in value of just 15%, reflecting a reasonably positive level of average growth of around 3% per annum. By 2007, it is estimated that the overall market will be worth some £41.9 billion, representing an increase of around 12% over 2003. |
| ‘Heavyside’ materials represent the largest sector of the UK Building and Home Improvement Products market, with a current estimated share of around 55%. Garden products and Hardware are also reasonably significant in the context of the overall market, with combined shares of approximately 23%. Lighting and Electrical accessories are currently estimated to hold around 7% share in 2003, with the Decorative products market having a similar proportion. The remainder of the market is composed of the kitchen and bathroom sectors, each having a 4% share by value. |
| The best performing products in the overall market in recent years have been the Garden and Decorative sectors, which have gained some share due to particularly healthy levels of value growth in recent years. This trend is expected to continue in the short to medium term, albeit at slightly lower levels of growth. |
| The macro market influences impacting on the market are obviously numerous and particularly wide-ranging. However, the level of activity in the construction industry is perhaps the most significant influencer of the overall market. UK construction, which would include housing and non-housing, has continued to increase since 1993 with this trend expected to continue in the medium term. Non-housing construction and repair, maintenance and improvement (RMI) accounts for the largest share of construction activity in the UK, with a current value of around £42.6 billion. RMI totals are expected to increase by around 4% between 2001 and 2004, with new work likely to increase by around 10% over the same period |
| In terms of distribution, the Builders and Plumbers Merchants remain the most dominant channel in the overall market, with an estimated share of around 26% in 2003. The DIY Multiples market has gradually increased its share in the market in recent years and is now currently estimated to generate around 17% of the total market value. The independent hardware sector is relatively small in the overall context of the market, with a share of around 4% in 2003, with other channels accounting for the remainder, such as Direct Supply, Electrical Wholesalers, Garden Centres etc. |
| The DIY Multiples have increased their activity in almost all areas of the UK Building and Home Improvement Products market, with their share rising by between 10-15% in almost all product sector areas since 1991, with some sectors increasing by up 30% or more. The multiples are expected to continue to take share from smaller retailers and other channels, albeit at a slightly slower rate than has previously been witnessed. |
| Rationalisation has continued amongst almost all channels in the overall market, with the DIY multiples sector having seen most consolidation in recent years. Builders Merchants have also seen fairly significant rationalisation in recent years, whilst independent hardware retailers have struggled to remain competitive, as the purchasing power of other distribution channels has increased and maintained pricing pressures. |
| In terms of the main products sectors, the key characteristic has been one of growth at, or above levels of inflation in the last 2 years. However, this disguises the trends in each sector, with several ‘Heavyside’ products, for example, remaining under fairly significant pricing pressures. Nevertheless, in terms of the overall market, future prospects are reasonably optimistic in the UK Building and Home Improvement Products market, given continued favourable economic conditions. |
TABLE OF CONTENTS
| 1. INTRODUCTION 7 |
| 2. SUMMARY 8 |
| 3. ECONOMIC ENVIRONMENT 11 |
| 3.1 GDP 11 |
| 3.2 INFLATION & INTEREST RATES 12 |
| 3.3 UNEMPLOYMENT & CONSUMER SPENDING 13 |
| 3.4 HOUSING & CONSTRUCTION 14 |
| 3.5 STERLING 15 |
| 3.6 CONCLUSIONS 15 |
| 4. BUILDING AND HOME IMPROVEMENT MARKETS 16 |
| 4.1 DEFINITION 16 |
| 4.2 UK BUILDING AND HOME IMPROVEMENT PRODUCTS MARKET 18 |
| 4.3 KEY MARKET INFLUENCES 23 |
| 4.3.1 Construction Background 23 |
| 4.3.2 Housing Transactions 25 |
| 5 DISTRIBUTION STRUCTURE 27 |
| 5.1 BACKGROUND 27 |
| 5.2 DIY MULTIPLES 29 |
| 5.2.1 Definition 29 |
| 5.2.2 Background To The UK DIY Multiples Market 31 |
| 5.2.3 UK DIY Multiples Market 34 |
| 5.2.4 Market Structure 37 |
| 5.2.4.1 Major DIY Multiples 39 |
| 5.3. BUILDERS AND PLUMBERS MERCHANTS 52 |
| 5.3.1 Definition 52 |
| 5.3.2 Market Size 52 |
| 5.3.3 Market Structure 57 |
| 5.3.4 Larger Regional Merchants 62 |
| 5.3.5 Medium Size Regionals/Local Companies 67 |
| 5.4 INDEPENDENT HARDWARE & DIY STORES 69 |
| 5.5 OTHER CHANNELS 75 |
| 6. PRODUCT REVIEW 77 |
| 6.1 OVERVIEW 77 |
| 6.2 DECORATIVE PRODUCTS MARKET 80 |
| 6.2.1 Definition 80 |
| 6.2.2 Market Size 80 |
| 6.2.3 Product Mix 81 |
| 6.2.4 Distribution 85 |
| 6.3 BATHROOM PRODUCTS MARKET 86 |
| 6.3.1 Definition 86 |
| 6.3.2 Market Size 86 |
| 6.3.3 Product Mix 88 |
| 6.3.4 Distribution 90 |
| 6.4 GARDEN PRODUCTS MARKET 91 |
| 6.4.1 Definition 91 |
| 6.4.2 Market Size 91 |
| 6.4.3 Product Mix 93 |
| 6.4.4 Distribution 94 |
| 6.5 HARDWARE/TOOLS/FIXINGS 96 |
| 6.5.1 Definition 96 |
| 6.5.2 Market Size 96 |
| 6.5.3 Product Mix 97 |
| 6.5.4 Distribution 99 |
| 6.6 ELECTRICAL/LIGHTING 100 |
| 6.6.1 Definition 100 |
| 6.6.2 Market Size 100 |
| 6.6.3 Product Mix 101 |
| 6.6.4 Distribution 103 |
| 6.7 KITCHENS 104 |
| 6.7.1 Market Definition 104 |
| 6.7.2 Market Size 104 |
| 6.7.3 Product Mix 105 |
| 6.7.4 Distribution 107 |
| 6.8 'HEAVYSIDE' MATERIALS 108 |
| 6.8.1 Definition 108 |
| 6.8.2 Market Size 109 |
| 6.8.3 Product Mix 110 |
| 6.8.4 Distribution 111 |
| 6.8.5 Roofing and Insulation 113 |
| 6.8.6 Bricks, Blocks and Concrete 115 |
| 6.8.7 Cement & Plaster 117 |
| 6.8.8 Timber/Glazing 118 |
| 6.8.9 Heating, Plumbing & Drainage 120 |
| 7. FUTURE PROSPECTS 123 |
DIAGRAMS
| CHART 1 BUILDING & HOME IMPROVEMENT MARKET 1998-2005 £M RSP 8 |
| CHART 2 INTEREST RATES AND INFLATION (RPI) FROM 1990-2005 12 |
| CHART 3 NUMBER OF EMPLOYEES IN EMPLOYMENT GB - JUNE 1982-02 (MILLIONS) 13 |
| CHART 4 UK BUILDING & HOME IMPROVEMENT PRODUCTS MARKET 1999-2007 £M RSP 18 |
| CHART 5 BUILDING AND HOME IMPROVEMENT PRODUCTS MIX BY VALUE (£M RSP) 2003 19 |
| TABLE 6 UK BUILDING AND HOME IMPROVEMENTS MARKET 2003 (£M RSP) 21 |
| CHART 7 KEY PRODUCT SHARE CHANGE 1999-2007 % BY VALUE 22 |
| TABLE 8 CONTRACTORS OUTPUT - NEW WORK AND RMI NON HOUSING - CURRENT PRICES (£ MILLION) 1995-2004 23 |
| TABLE 9 HOUSEBUILDING COMPLETIONS (000'S DWELLINGS) 1994-2006 IN GREAT BRITAIN 24 |
| TABLE 10 NUMBER OF PROPERTY TRANSACTIONS IN ENGLAND AND WALES 1996-2002 25 |
| CHART 11 DISTRIBUTION OF BUILDING/H.I. PRODUCTS BY SECTOR - 2003 BY VALUE 28 |
| TABLE 12 IMPORTANCE OF THE DIY MULTIPLES BY SECTOR 1991-2003 BY VALUE 31 |
| CHART 13 DIY MULTIPLE SHARE CHANGE 1999-2007 % BY VALUE 32 |
| TABLE 14 TOTAL HOUSEHOLD EXPENDITURE ON DIY & HARDWARE GOODS 1997-2003 (£M) 33 |
| TABLE 15 DIY MULTIPLES MARKET - 1995-2005 (£M RSP) 34 |
| TABLE 16 UK DIY MULTIPLES - NUMBER OF OUTLETS 1998-2003 38 |
| CHART 17 DIY MULTIPLES MARKET SHARE 2003 39 |
| CHART 18 B & Q PRODUCT MIX - SHARE BY VALUE 2003 42 |
| CHART 19 WICKES PRODUCT MIX - SHARE BY VALUE 2003 45 |
| CHART 20 FOCUS PRODUCT MIX - SHARE BY VALUE 2003. 46 |
| CHART 21 HOMEBASE PRODUCT MIX - SHARE BY VALUE 2003 48 |
| CHART 22 'OTHERS' DIY MULTIPLES PRODUCT MIX 2003 BY VALUE 51 |
| TABLE 23 UK BUILDING & PLUMBING MERCHANTS MARKET 1996 TO 2006 - BY VALUE (£ MILLION AT MERCHANT SELLING PRICES) 53 |
| CHART 24 MERCHANTS MARKET SHARES 2003 57 |
| TABLE 25 LEADING INDEPENDENT HARDWARE/DIY RETAILERS - SHARE BY VALUE 70 |
| TABLE 26 LEADING WHOLESALERS OF BUILDING/DIY PRODUCTS - SHARE BY VALUE 73 |
| CHART 27 BUILDING AND HOME IMPROVEMENT PRODUCTS MARKET VALUE 1999-2003 MSP (£M RSP) 78 |
| TABLE 28 BUILDING MATERIALS - PRODUCT MIX BY DISTRIBUTION CHANNEL 2003 79 |
| CHART 29 DECORATING MATERIALS MARKET 1999-2004 (£M RSP) 81 |
| CHART 30 DECORATIVE PRODUCTS MARKET - BY PRODUCT GROUP 2003 82 |
| CHART 31 ADHESIVES/SEALANTS - MIX BY PRODUCT 2003 84 |
| TABLE 32 DISTRIBUTION OF DECORATIVE PRODUCTS - BY VALUE 2003 85 |
| CHART 33 BATHROOM PRODUCTS MARKET 1999-2003 (£M RSP) 87 |
| CHART 34 UK BATHROOM MARKET SHARE BY PRODUCT SECTOR BY VALUE 2003 88 |
| TABLE 35 DISTRIBUTION OF BATHROOM PRODUCTS - BY VALUE 2003 90 |
| CHART 36 GARDEN PRODUCTS MARKET 1999-2004 (£M RSP) 92 |
| CHART 37 GARDEN PRODUCTS - SALES BY PRODUCT 2003 RSP 93 |
| TABLE 38 DISTRIBUTION OF GARDEN PRODUCTS - BY VALUE 2003 94 |
| CHART 39 HARDWARE / TOOLS / FIXINGS MARKET 1999-2004 (£M RSP) 97 |
| CHART 40 HARDWARE/TOOLS/FIXINGS - SHARE BY PRODUCT SECTOR 2003 98 |
| TABLE 41 DISTRIBUTION OF HARDWARE/FIXINGS/TOOLS - BY VALUE 2003 99 |
| CHART 42 LIGHTING AND ELECTRICAL PRODUCTS MARKET 1999-2004 (£M RSP) 100 |
| CHART 43 ELECTRICAL/LIGHTING - SHARE BY PRODUCT SECTOR 102 |
| TABLE 44 DISTRIBUTION OF ELECTRICAL/LIGHTING - BY VALUE 2003 103 |
| CHART 45 UK KITCHEN FURNITURE PRODUCTS MARKET 1999-2004 (£M RSP) 105 |
| CHART 46 KITCHENS - SHARE BY PRODUCT 2003 106 |
| TABLE 47 DISTRIBUTION OF KITCHEN FURNITURE - BY CHANNEL 2003 107 |
| CHART 48 BUILDING AND HOME IMPROVEMENT PRODUCTS MARKET VALUE 1999-2004 (£M RSP) 110 |
| CHART 49 'HEAVYSIDE' MATERIALS - MIX BY PRODUCT 2003 111 |
| TABLE 50 HEAVYSIDE - SALES BY DISTRIBUTION CHANNEL - BY VALUE 2003 112 |
| CHART 51 ROOFING- SHARE BY PRODUCT SECTOR 2003 114 |
| TABLE 52 MIX OF INSULATION PRODUCTS BY MATERIAL 2003 % BY VALUE 115 |
| CHART 53 BRICKS, BLOCKS & CONCRETE - SHARE BY PRODUCT SECTOR 2003 116 |
| CHART 54 CEMENT/PLASTER - SHARE BY PRODUCT SECTOR 2003 117 |
| CHART 55 TIMBER & DOOR/WINDOWS - SHARE BY PRODUCT SECTOR 2003 119 |
| CHART 56 HEATING, PLUMBING & DRAINAGE - SHARE BY PRODUCT SECTOR 2003 121 |
Text © 2004 AMA Research
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