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KN51000 KEY NOTE BUILDERS MERCHANTS OCTOBER 2000

ISBN 1-84168-123-7

Editor: Jenny Baxter

This report covers: builders' merchants, diy stores,bricks, roofing tiles, cement, sand, gravel, private contractors, RMI, repair, maintenance, improvement

Companies covered include: Wolseley, meyer International, Travis perkins, Graham Group, Jackson Building Centres, Cooper Clarke Group, Ridgeon Group, WTB Group, William Wilson Holdings, Homebase, Wickes, Focus Do It All

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EXECUTIVE SUMMARY

Sales through builders’ merchants reached an estimated £8.57bn in 1999, following a 4.5 percent increase on 1998. The market is broadly divided into three sectors: heavy side (bricks, cement, drainage pipes, roofing tiles, sand and gravel, timber, etc.); light side (internal fittings and materials for bathrooms, kitchens, heating, plumbing, etc.); and tools and tool hire. Deliveries, stocks and international trade statistics are given for principal product categories.

As builders’ merchants’ main customer, the construction market is discussed in terms of its major segments: housebuilding, commercial, industrial, and repair, maintenance and improvement (RMI) work. Structurally, the builders’ merchants market underwent important changes in 1999/2000. Following the recent acquisition of Graham Group PLC by Meyer International PLC (which owns Jewson Ltd), the market is dominated by three companies — Wolseley PLC, Jewson Ltd and Travis Perkins PLC. These companies have a combined UK turnover of £3bn, or 35 percent of the market. In 2000, Meyer International was bought by St Gobain of France.

DIY stores continue to compete with builders’ merchants for business from small contractors. This forms a large part of the market, since 84 percent of all private contractors (of which there are 135,755) employ fewer than four people. The major DIY stores — B&Q, Homebase, Focus Do It All and Wickes — continue to grow in terms of turnover, number of outlets and their interest in trade business. There is also the prospect of Home Direct and other huge US DIY stores entering the European market. Environmental regulations and related taxes are now being applied to the construction industry with increasing vigour. At grass roots level, there is a need for builders’ merchants to be more aware of customer care and to invest in training.

In view of the current downward trend in the housing market, the future for builders’ merchants is difficult to predict. Key Note forecasts that sales will rise by 4 percent to £8.91bn in 2000 and, thereafter, increase annually to reach £9.98bn in 2004.

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TABLE OF CONTENTS

Executive Summary


1. Market Definition

INTRODUCTION
Heavy Side
Light Side
Tools and Tool Hire
TYPES OF OUTLET
Builders’ Merchants
DIY Stores
Other Specialist Outlets
MARKET POSITION
MARKET TRENDS
New Construction
Housebuilding
Table 1: New Housing Output by Value at Current Prices (£m), 1995-1999
Private Sector Industrial Construction
(£m), 1995-1999
Private Sector Commercial Construction
Current Prices (£m), 1995-1999
Repair, Maintenance and Improvement
Current Prices (£m), 1995-1999


2. Market Size

INTRODUCTION
Table 5: Construction Output by Value at Current Prices (£m), 1995-1999
THE TOTAL MARKET
Table 6: The Builders’ Merchants Market by Value (£bn), 1995-1999
BY MARKET SECTOR
Bricks and Roofing Tiles
Cement
by Volume (000 tonnes), 1995-1999
Sand and Gravel
Table 9: The Sand and Gravel Market by Volume (000 tonnes), 1995-1999
FOREIGN TRADE
Exports
by Value (£m), 1995-1999
Imports
by Value (£m), 1995-1999


3. Industry Background

INDUSTRY CONCENTRATION
Equipment by Turnover (£000), 1999
HOUSING STARTS AND COMPLETIONS
Completions (000), 1995-1999
EMPLOYMENT
TRADE ASSOCIATIONS
Builders’ Merchants Federation
Construction Products Association
Association of Building Component Manufacturers


4. Competitor Analysis

THE MARKETPLACE
(£m), 1998/1999
MARKET LEADERS
Wolseley PLC
Meyer International PLC
Travis Perkins PLC
Graham Group PLC
Jackson Building Centres Ltd
Cooper Clarke Group Ltd
Ridgeon Group Ltd
WTB Group Ltd
William Wilson Holdings Ltd
ADVERTISING AND PROMOTION
June 1999 and 2000


5. Strengths, Weaknesses, Opportunities and Threats

STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS


6. Buying Behaviour

PRIVATE CONTRACTORS
by Numbers of Employees, 1994-1998
Table 17: Private Contractors in Great Britain by Trade (number and percent), 1998
REGIONAL CONCENTRATION
(number of firms), 1995-1998
to the Industry
INTRODUCTION
MAJOR SUPPLIERS
Heavy Side
Light Side
Tool Hire
PRODUCT SOURCING
AND MERCHANDISING


8. Current Issues

THE DIY THREAT
B&Q
Homebase
Wickes
Focus Do It All
US Stores
Don’t Do It Yourself
MANAGEMENT
TRAINING
ENVIRONMENTAL ISSUES
VAT ON RMI WORK
CORPORATE ACTIVITY


9. Forecasts

THE ECONOMY
FORECASTS 2000 TO 2004
Table 19: Forecast Builders’ Merchants Market by Value (£bn), 2000-2004
NEW CONSTRUCTION
Housebuilding
Table 20: Forecast Housing Starts and Completions (000), 2000-2004
PRIVATE SECTOR COMMERCIAL CONSTRUCTION
by Value (£m), 2000-2004
Other New Work
REPAIR, MAINTENANCE AND IMPROVEMENT
(£m), 2000-2004


10. Company Profiles

Jewson Ltd
Travis Perkins PLC
Wolseley PLC


11. Further Sources

Associations
Periodicals
Directories
General Sources
Bonnier Information Sources
Government Publications
Other Sources

Key Note Research

Text © 2000 Key Note

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Last updated by Jacob van Eldik 22th November 2000