DIY Multiples Market Report, the edition contains analysis of the market for DIY and home improvement multiples, including a review of the market, factors affecting growth, a review of the supply chain and an analysis of the product groups relevant to the sector, assessed by product group and sub-category.
Garden, domestic landscaping and leisure is the largest product category within the home improvement multiples sector, accounting for over 20 per cent of total sales. The other major product groups are building supplies, lighting & electrical, tools, hardware & PPE and decorating products.
B&M Retail, B&Q, CDS Superstores, Homebase, Maxwells DIY, Robert Dyas, Wickes and Wilko Retail are among those included.
AMA said: "Overall home improvement market conditions have improved in recent years following a period of falling incomes, rising household expenses and employment insecurities, with sales in the multiples sector having increased steadily since 2012 - a year when particularly poor weather had a marked impact on demand for products used outdoors."
"Underpinning the market over the last few years has been factors including; growth in the general economy, rising incomes, growth in online shopping, a strong housing market and much better summer weather in 2013 and 2014. However, growth has to some extent been constrained by a shift away from householders doing DIY jobs towards using tradesmen. This has been most noticeable among the under 35s, where a general lack of skills / aptitude and a preference for spending money and time on other things has developed over the last few years. Also, the ongoing housing shortage and accompanying rises in house prices and mortgage deposits has made it harder for potential first time buyers to buy a home, forcing them to rent from private landlords. Affluent, and often older, homeowners have also been generally more likely to use tradesmen to work on extensions, loft & basement conversions and garden landscaping.
"Tradesmen, though, typically use trade suppliers such as builders merchants, trade counters and specialist distributors. This trend to GSI (Get Someone In) has contributed towards some loss of share for the home improvement multiples in certain product markets, although some of the leading multiples are also significant trade suppliers. In recent years, the traditional home improvement multiples have implemented major changes including store rationalisation and diversification, driven by increasing competition in core product markets from general merchandise multiples, specialist online home improvement products retailers, grocery multiples, discount chains and catalogue stores. Other strategies have included expanding product lines into non-DIY offerings including homewares, electronic security equipment, lighting and kitchens & bathrooms.
"Following the EU referendum, there is considerable uncertainty as to how the UK economy will fare over the next few years, with many experts expecting a recession in the building and construction industry. As with the market for building materials in general, it is expected there will be a marked impact on home improvement retailing, as householders cut back on spending on major projects. Many home improvement products are imported and a weak pound is likely to drive up prices of commodities from China etc., which in turn would impact on suppliers and retailers’ margins while also possibly deterring consumers. Other factors likely to impact on home improvement multiples over the next few years include factors such as lower home ownership, further growth in private rental, younger people living with parents longer, average home sizes decreasing, increased flat and apartment ownership, the continuing trends towards using tradesmen and increasing use of online retail stores and other channels offering products at increasingly competitive prices e.g. multi-channel operators and budget retail multiples."