KN31094

KEY NOTE Market Report Power Tools: February 2004

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This report covers: power tools,drills, and, screwdrivers, sanders, angle grinders, polaners, routers, saws, multi-function power tools, other power tools, DIY market, decorating tools, power saws, power drills, hand-held power tools,

Companies covered include: Alba, Black & Decker, Earlex, Hitachi Power Tools UK, Makita UK, Robert Bosch, Atlas Copco AB, Kingaavon, Metabowerke GmbH, Plasplugs, Roto Zip Tool Corporation, Ryobi Technologies, Draper Tools, Hilka Tools, Toolbank, Einhell, Spear & Jackson, Stanley Tools,Dremel, Makita,

EXECUTIVE SUMMARY

Executive Summary

Key Note estimates that, in 2003, the UK power tools market (excluding accessories) was worth £284m at retail selling prices (rsp), an increase of 4% on 2002. In 2003, power tools accessories accounted for an estimated £68m at rsp, meaning that, in total, the UK power tools and accessories market was worth an estimated £352m at rsp, an increase of 3.5% on 2002.

The range of products available in the power tools market is large and market sectors include: drills and screwdrivers; sanders, angle grinders, planers and routers; saws; decorating tools; multi-function power tools; other power tools; and accessories. Within these sectors, manufacturers continue to produce new powered products. Excluded from this report are garden power tools, which are covered in Key Note's Garden Equipment Market Report.

Between 1998 and 2002, there was positive real economic growth, a strong rise in household disposable income levels and continued growth in the number of UK households, which have helped to drive spending on power tools. The high level of home ownership in the UK encourages DIY activity, and overall spending on DIY tools and materials has increased over the past 5 years.

There was a high level of product innovation between 1998 and 2002, which continued in 2003. Some new types of product have been introduced to the market, while at the same time, improvements have been made to existing products to make them easier to use and enhance their performance.

Over the past 5 years, the main feature of the market has been the emerging dominance of low-cost imported products manufactured in China and the Far East, which sell as entry-level brands and as retailers' own labels. Competition from these cheaper products has had a downward pressure on prices throughout the market. Although this development has helped to bring about strong market growth, the rise in value has fallen behind volume growth.

The dominance of the leading manufacturers' brands — notably Black & Decker — has been eroded and those in the own-label sector, such as B&Q's Performance Power, have made strong progress. Despite the high level of competition, there have been some new market entrants in the UK since 2000 and these appear confident of gaining market share.

Key Note expects growth in the value of the power tools and accessories market to be around 4.3% in 2004, rising to over 4.4% each year over the following 4 years. Growth in cordless tools is expected to continue and the use of nickel metal hydride (Ni-MH) and lithium ion (Li-Ion) batteries — which extend the usage time of cordless tools — will boost the market.

TABLE OF CONTENTS

Text © 2004 Key Note

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Last updated by Amanda Porteous July 2004