SUMMARY OF REPORT CONTENTS

In 2005, the UK DIY multiples market was estimated to be worth just under £7.6 billion (turnover) at Retail Selling Prices (RSP). The multiples market has experienced significant growth since 1995.

For a sustained period of around ten years, the retail market has benefited from a positive housing market and refurbishment levels as well as higher levels of consumer confidence, driven by factors such as financial windfalls, high levels of house price inflation, low interest rates and increased borrowing.

The DIY multiples sector has continued to benefit from the positive market conditions, outperforming the overall retail sector with underlying growth of around 8-10% per annum between 2000-03, despite a number of negative influences including the global economic slowdown following 9/11.

However, the UK economy, and consumer confidence and spending in particular, have been affected by lower house price inflation and higher interest rates in 2004 and 2005. The level of home improvement activity has decreased with consumers less willing to purchase high-ticket items. Another key factor influencing the DIY sector includes the high level of price competition in recent years. Consequently, the value of the DIY market declined slightly in 2005 to £7,595 million. 

Despite the lower growth in the DIY market over the last two years, the market continues to be characterised by people wanting to make changes to their home environment, primarily driven by changes in fashion.  DIY retailers are also recognising the importance of women, increasingly the decision-makers when it comes to DIY, and the spending power of the ageing population.  As a result of these trends, a wider range of products is now available via the major DIY outlets, including home furnishings, home adornment or ‘finishing’ products and furniture.

The DIY multiples market has experienced some structural changes in the last two years following the sale of Wickes by Focus to the Builders’ Merchant Travis Perkins. Following the sale, Focus has continued to develop and expand their product range, predominantly in the ‘light’ DIY and home improvement sector, while Wickes continue to target the small tradesman and serious DIY customer.  B&Q also began extending their activity both in Europe and on an international scale, in particular Asia, further increasing their sourcing and buying opportunities.  The ‘amalgamation’ of Argos and Homebase has enabled a centralisation of purchasing procedures between Homebase and Argos, and has increased the range of products offered by Homebase to include a wider range of home furnishings and furniture etc.

In terms of the number of outlets, the rapid growth experienced in the 1990’s has stabilised in recent years at approximately 1,080 stores.  Refurbishment of existing stores is becoming increasingly common in order to utilise available space more effectively.  Tighter planning regulations and a shortage of suitable land, in addition to the high cost of land has prompted the shift in focus to refurbishment rather than store expansion programmes. Homebase have installed mezzanine floors to provide showrooms for furniture, furnishings and kitchen ranges, whilst B&Q have continued to convert Supercentres to ‘Mini-Warehouse’ formats, offering a wider choice to consumers in regions where a full Warehouse would not be viable. B&Q have also focused on store layout with the introduction of room sets showing kitchen and bathroom products in some stores. In addition, this strategy has included the introduction of several new format stores. 

The Garden/Leisure sector represents an estimated 24% of the total DIY multiples market with a total value of just under £1.8 billion at RSP in 2005.  Building Materials represent the next most important sector at over £1.2bn followed by Decorative products, which includes paint and wallcoverings, at an estimated £769m. 

Hardware/Tools and Housewares contribute approximately 8% by value to the overall DIY Multiples market, representing a value of around £637million. 

The Furniture sector is currently estimated to account for around 8% of the total multiples market in 2005 and the plans by the major multiples indicate that this sector will see an increase in market share in the short to medium future. 

The Window and Floorcoverings sector accounts for around £626 million at RSP in 2005, reflecting a share of around 8%. Bathrooms are currently estimated to contribute £593 million to the DIY multiples market, representing a market share of 8%. 

The Lighting and Electrical sector is currently estimated to account for around 8% of the market, representing a value of just over £641 million in 2005.   Other miscellaneous products such as Christmas goods and accessories are estimated to contribute around £697 million to the overall market, reflecting a share of around 9%. 

The product sectors most likely to see significant growth, given the priorities of the major multiples, are furniture and housewares.  The expansion of mezzanines in Homebase stores has seen an increase in showroom areas, which are largely given over to furniture and kitchens/bathrooms.  The B&Q store development scheme and the new store formats have increased the range of products offered along with the focus on furniture, room sets and finishing products.

Companies Mentioned in this Report.

B & Q, Homebase, Focus Group, Wickes, Trago Mills, Leekes, Gynn Webb, Budget DIY, Arnold Laver, Godfrey DIY, American Standard, Jacuzzi UK Group, Twyford Bathrooms, Qualceram Shires, Triton, Kohler Mira, Baxi Group, Aqualisa, Gainsborough, Heatrae Sadia, Newteam, Redring, Gummers, Showerlux UK, Daryl Industries, Coram UK, BHD Aqualux, Manhatten Showers, Selecta Shower Products, Bristan, Pegler, Howard Bird, Grohe, Hansgrohe, Deva Tap Company, J & J Ormerod, Crown Products, Alston Cabinets, Woodberry Bros & Haines, New Plan, Daval Furniture, Spacemaker, Moores Furniiture Group, Gower, Duckers, Igoe, Hygena/Schreiber, Bernstein, Magnet, Symphony, MKD, Dulux, Akzo Nobel, Imperia; Home Décor Group, Kalon, TotalFinaElf S.A., SigmaKalon, Ronseal, Izal Ltd, Sherwin-Williams Group, ICI Woodcare, H & R Johnson Tiles Ltd, Pilkingtons Tiles Group Plc, British Ceramic Tiles, Borden Decorative Products, Imperial Wallcoverings, Blackstone Group, Englewood, Graham & Brown, Cova Products, Walker Greenbank, Ibstock, Marshalls, Hanson, Baggeridge, Chelwwod, Ambion, Celcon, Marley, Plasmor]Marshall, Tarmac, BPB Industries, Knauf, Lafarge, Redland Plasterboard, Premdor, Magnrt, C K Anderson, Silvermans, Finnforest, Wilkinsons, Polucell, Evode, Solvite, Henkel, Uniibond, Loctite, Bostik, Sellotape, Vallance, Dow, Tetrosyl, Caberboard, Silver Lynx, Spur, Zamba, Dexion, Caradon MK Electric, Ashley & Rock, Electrium, Eaton Electri, BDC, Pact International, Pik-a-Pak, Poole Lighting, ASD, Homeguard, Philips, Ring, Osram, GE, Laura Ashley, Harveys.