The domestic lighting market within this report is comprised of three main product sectors - lampsbulbs, light fittings and lighting accessories. Defining the market can be difficult as there is overlap in some sectors between domestic and non-domestic applications and many accessories can be used for other electrical products as well as lighting.

Given these limitations, Market Assessment estimate the retail market at around £730 million at retail selling prices. Following several difficult years in the early 1990s, the domestic lighting market has experienced some recovery since 1993, with sales forecast to grow by a further 6 percent in 1997 to around £770 million.

Market performance, however for the different product sectors has been significantly different in recent years. Sales of lampsbulbs have been the most steady, increasing to around £160 million in 1996. The vast majority of bulb sales are replacement demand, with a high percentage directly due to product failure. Equally, average retail prices are low and, consequently, sales have been relatively recession-free and the market has experienced some underlying growth, reflecting the gradual increase in the number of properties and some move to higher-value products.

The key product change has been the growth of compact florescent bulbs which provide a substantially longer life and lower energy consumption. However, the high initial purchase cost has restricted market acceptance to date as manufacturers and retailers seek to persuade householders of the real long-term benefits.

Light fitting sales have been more volatile in recent years but are now experiencing stronger growth with the market valued at £325 million in 1996. Rising consumer confidence and spending on home improvement products is motivating refurbishment projects, with lighting arrangements now regarded as a key element of home decor.

Consumers are looking for more flexibility in lighting arrangements throughout the home with spotlights an increasing fixture in kitchens and bathrooms, for example, while table lamps, cabinetpicture lights are growing at the expense of traditional ceiling lights.

This trend has affected some accessories, with growth in brass fittings, dimmer switches etc, while electric timer devices are also growing in response to consumer concerns over crime. Accessories have experienced the most difficult trading environment due primarily to competitive pricing as a result of growing low-cost imports.

An improving housing market should help stimulate the market for all lighting products. The performance of the housing market is a major influencing factor and with new housebuilding and housemoving levels both set to increase by over 10 percent in 1997, this should feed through into buoyant lighting product sales.

The supply structure for lighting products differs significantly between the product sectors. Lampsbulbs is a very concentrated market with GE Lighting, Philips, Osram (Siemens), Ring major suppliers in the domestic market.

Fittings however is a much more fragmented market reflecting the whole diversity of materials and designs, which results in low barriers to market entry compared with bulb production. Accessories is dominated by several major suppliers such as MK Electric, Volex, Wylex, Ashley-Rock, Legrand, Delta etc, though imported products are taking an increasing share of the market.

DIY Multiples are the dominant outlet in terms of distribution as a result of their strength in both bulbs and fittings. Other major outlets tend to focus on either bulbs or fittings. For example, grocery multiples and Woolworth's are strong in bulbs, while BHS and Lighting Specialists are stronger in the supply of fittings.

The supply of accessories is different as the majority of purchases are made by electrical contractors. While replacing a plug is within the bounds of householders, most aspects of rewiring are undertaken by professionals and, as a result, electrical wholesalers represent the dominant distribution channel, though DIY Multiples offer an increasing range of accessories.

Prospects for the lighting market are reasonably optimistic in the short term. Housing activity is increasing and consumer spending on home improvement products is buoyant, which should feed through into sales of lighting products. The major concern is the threat of inflation and a series of interest rate rises have been implemented in mid1997 to curb consumer spending. This is likely to feed through into 1998 resulting in some slowdown of market growth, but in overall terms the domestic lighting market is forecast to increase by 17 percent over 1996 levels, to an estimated value of £854 million by the year 2000. Fittings and bulbs are likely to be the most buoyant sectors with accessories experiencing low value growth as cheaper imports continue to gain share.