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In
2005, the bathroom products market was worth £858m at manufacturer
selling prices.The
growth of the bathrooms market was stimulated by a number of factors
between 2000 and 2002; in particular higher levels of consumer
confidence and a buoyant housing market were influential. One particular
area of growth was the increasing installation of en suites, downstairs
cloakrooms and utility rooms, particularly in new build. The high
level of house price inflation, which prompted record levels of equity
withdrawal, further supported the growth of home improvements.
Consumer
confidence remained high in 2003 and for most of 2004. The bathroom
market was supported by a higher level of house building completions and
by a high level of mortgage equity withdrawal, as borrowing on a secured
basis remained relatively cheap, in line with low interest rates.
The situation
started to deteriorate towards the end of 2004 with lower levels of
consumer confidence and spending, along with a series of interest rate
rises. As a result, growth in 2005 was lower compared to 2003 and 2004,
with a static house building sector and a lower level of home
improvements. The bathroom market also suffered from rising raw
material costs and intense price competition, in the sanitaryware sector
in particular.
Overall market
trends in the first half of 2006 are broadly in line with the last two
years, primarily due to the economic situation and lower levels of
consumer confidence and spending. However there have been signs of
improvement in the Spring and in the middle part of the year, with house
prices rising and consumer spending picking up, to the point where the
Bank of England felt it prudent to increase interest rates in the
summer, in an attempt to moderate the upward inflationary pressures.
Despite the
increasing importance attached to quality and design, the level of
imports from low-cost countries has increased and a significant number
of UK manufacturers have moved production facilities overseas in order
to compete more effectively. The growth of lower cost imports has
increased the level of price competition across all sectors of the
market, with sanitaryware products from higher value EC sources such as
Italy and France also experiencing a decline in average prices over the
past three years.
The increasing
level of imports has also been driven by retailers sourcing own brand
products directly from lower cost sources. Price competition,
particularly in the DIY sector, has been a major factor affecting value
growth over the last two years, across baths and sanitaryware.
Furthermore, the
average price of some bathroom products has also declined in countries
traditionally focused on the upper end of the market, further driving
the level of price competition.
Raw material
prices are likely to remain high over the next year or two, driven by
supply shortages, which will continue to add pressure to margins. The
level of imports is expected to remain high, with further increases from
lower cost sources such as China and Eastern Europe.
These factors are
likely to maintain pressure on price levels in the market and as a
result volume growth may be expected to be ahead of value growth over
the next 2 to 3 years.
Baths and
sanitaryware continue to dominate the industry's sales, despite the high
level of price competition in this sector. However, the brassware,
accessories and furniture sectors are growing in significance.
Although the
sanitaryware sector continues to account for the largest share of
the market in 2005, this sector has experienced a decline in value
following the lower level of refurbishments, along with the high level
of imports driving price competition.
The bath
sector also declined in value in 2005, following the continued shift to
showering and the lower level of replacement purchases. The focus on en
suite/additional bathrooms in new homes in recent years has not
supported the bath market, favouring more space-efficient showers
instead. Additionally, the majority of new build properties, both small
and large, include at least one bath, but 3 bedroom properties and
larger usually incorporate two or more showers. In terms of the product
mix in the bath sector, shower baths have increased in popularity.
The brassware
sector has gained share in the market having experienced a higher
level of growth in 2005 compared to the bath and sanitaryware sectors.
The volume of mixers is increasing in line with the growth of
high-pressure water systems in both new build and replacement
situations, largely at the expense of pillar taps.
In terms of value,
the brassware market has continued to benefit from the shift towards
higher value products in the mid to upper sectors of the market. In
addition, features such as water filters in the kitchen sector, along
with water saving devices and temperature regulators in the basin and
bath sectors, have also supported average values. However, the wider
range of products available via the DIY sector in recent years has
contributed to the growth of lower value products, which has limited the
value growth of the market somewhat.
Growth has also
been lower in the bathroom accessory
and furniture sectors, although consumers are trading up to
higher quality products in these sectors. In the accessory sector,
recent trends have favoured wall-mounted accessories predominantly in
chrome. In the furniture sector, the wide range of styles now available
has boosted growth in terms of both volume and value, with modular
furniture increasing in popularity.
The increasing
popularity of ‘wellness’ products has supported the whirlpool and spa
sector, although its share within the bathroom market remains
small. Whirlpools/Spas, which have traditionally been viewed as an
expensive luxury, are fast becoming more affordable for the mass
market. Manufacturers are also adapting their products for confined
spaces with the launch of whirlpool/spa shower-baths. As awareness and
distribution expands, this market is likely to grow, albeit on a gradual
basis.
The key suppliers
of baths and sanitaryware include American Standard, Jacuzzi and
Twyford Bathrooms. Other suppliers such as
Roca, Dahll,
VitrA
and other importers have gained share in recent years. Bristan
and American Standard are the two major manufacturers in the
brassware sector, with other suppliers such as Hansgrohe and the
Deva Tap Company gaining share in this sector in recent years.
Key suppliers of
accessories include Croydex, Bemis, Polypipe (incorporating
Celmac), Samuel Heath and Roper Rhodes. Key furniture
suppliers include Shades and Utopia, along with the major
bath and sanitaryware suppliers such as Jacuzzi, Ideal Standard
etc.
In terms of
distribution, the merchants account for around 45% of bath and
sanitaryware sales, however the DIY multiples and bathroom specialists
are gaining share at their expense.
Regarding the
distribution of brassware, the merchants continue to dominate, supplying
domestic and non-domestic applications. However, the DIY multiples have
also gained share in this sector, reflecting improved product ranges,
displays and advice.
The distribution
of bathroom accessories is heavily biased to the DIY multiples. As a
result, DIY multiples take over half the retail share, with bathroom
specialists counting for around 14%. The merchants also claim a
substantial share. They tend to be stronger in those product ranges
more closely linked to bath and sanitaryware sales, such as toilet seats
and bath panels.
Traditionally,
fully fitted furniture was distributed through merchants, factors and
bathroom specialists, while freestanding furniture and vanity units were
mainly distributed though DIY multiples and retail outlets. However,
the distribution channels have become increasingly blurred with all
sectors of the market supplying a range of fully fitted and modular
furniture. The bathroom specialists tend to offer higher value fitted
and modular furniture, while the DIY sector offer fitted and modular
furniture aimed at the mass-market sector.
Whirlpool/spa
distribution is biased to merchants and bathroom Specialists, as these
products are not yet widely regarded as DIY products. However, the DIY
sector may experience some growth in the medium term due to the
availability of wellness products through this sector, e.g. steam
cabins. | 
