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The UK DIY multiples market was worth just over
£7.2bn in 2007, a rise of 1% since 2006. Current expectations are
that the market will decline reasonably significantly during 2008
and 2009, but will begin to recover from this difficult period, and
experience growth 2010-2012 of 2-3% per annum.
The UK DIY multiples market has experienced a
difficult time over the past few years, with 2005 and 2006 proving
to be particularly difficult, as lower house price growth, falling
consumer confidence and declining interest in home improvement took
their toll on the market. 2007 saw the market recover somewhat,
buoyed by favourable weather over the key Easter trading period,
however the summer floods, followed by the deteriorating economic
condition towards the end of the year stifled this growth.
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A number of key external influences have had a
significant impact upon the market over the last 2-3 years. The
performance of the housing market, growing threat of competitive retail
channels, growth of ‘Get Someone In’, changing customer profile and the
increased emphasis placed on ‘green’ issues have all had an effect on the
market in recent years.
The DIY market’s close links to the housing market
mean that the performance of the two is also linked. The current decline
being experienced by the housing market is expected to have a detrimental
effect on consumer confidence and on the DIY multiples, as RMI activity,
new housebuilding and housing transactions have all fallen. This housing
decline, coupled with the poor economic environment are expected to cause
the DIY multiples market to decline by 6% in 2008. As consumer confidence
recovers around 2010, the fortunes of the DIY multiples are also expected
to recover, aided by strong brands, extensive store networks and large
marketing budgets.
DIY
multiples have had to adapt to the changing environment in which they now
operate, and many have taken steps to maintain and expand their sales.
Recent developments include adjusting their market position towards the
‘home adornment’ end of the market, attempting to appeal more to trade
customers and expanding their product ranges to include more and more
non-core products such as smaller electrical appliances and soft
furnishings.
B&Q
continue to be the dominant player in the market, with Homebase, Wickes
and Focus their major competitors. Several smaller companies have
struggled in recent years, with Budget DIY and Glynn Webb both entering
administration, while others have been forced to close stores in an
increasingly difficult trading environment.
Within
the multiples’ products, performance has varied significantly between
different sectors. Sectors such as Lighting & Electrical Products have
performed strongly, boosted by product innovation and a growing lamps
market. Other sectors within DIY multiples have struggled, including
Window & Floor Coverings, affected by the decline in popularity of
laminate flooring and increased price competition.
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