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Sales of
conservatories have increased substantially over the last decade and
represent the best performing sector of any major consumer durable.
Consumer awareness and interest in the product is still very high, with
most householder surveys indicating conservatories high up on the list
of preferred home improvements.
Since the mid-1990s, market volumes have continued to
grow strongly, as illustrated in the chart below. However, the
conservatory market experienced a significant fall in demand towards the
end of 2004, affecting the market performance in 2005 and 2006, though
this decline is thought to be temporary. Annual volumes peaked at
around 230,000 in 2003/2004 and were estimated at around 205,000 in
2005.
It is estimated
that the dramatic decline in volume sales will have continued to affect
market growth to the end of 2006. However, prospects for the
conservatory market in 2007 onwards are more positive, providing the
housing market, which is showing signs of improving, stays strong and
the general economic climate remains favourable.
There is an
underlying demand for conservatories as they remain a desirable product,
and household penetration rates are still relatively low, so sales are
estimated to continue to grow for the forseeable future. However, demand
will continue to fluctuate – as ‘luxury’ or at least ‘non-essential’
items they are very sensitive to changes in economic conditions, and
average growth in the medium term is likely to be at more sustainable
levels than previously experienced.
However, there are
a number of longer term trends that are affecting the market negatively
and may impact on future volume and value growth. One of these is the
trend towards smaller households and the accompanying trend towards
building flats, apartments and smaller houses as opposed to larger,
detached houses. Even where houses which are suitable for
conservatories are built, increasing land prices have led to smaller
plots with space added by building on three levels and providing
relatively small gardens. This trend appears to be near enough
irreversible and affects current newbuild sales of conservatories but
may also, more importantly, limit the scope for future conservatory
sales.
PVCu remains the
dominant frame material for conservatories with an estimated current
share of 85%. Timber’s share of the market has continued to decline as a
frame material for conservatories and now accounts for an estimated
share of around 15%, with aluminium experiencing a rapid decline in the
1990’s and now only accounts for around 1% of installations.
The share of
timber is unlikely to decline much further at the expense of PVC-u, as
timber is still preferred by many homeowners, particularly for listed
buildings and higher end applications. However, longer term availability
of hardwood from sustainable sources may affect the share timber in
future, and substantial changes in raw material prices could potentially
change the frame material mix over the medium term.
In overall terms,
the supply structure is still very fragmented though there has been some
consolidation in recent years. While Anglian and Everest are leading
brand names in the replacement window market, this sector is dominated
by 2000+ companies each typically installing a small volume of
conservatories.
Leading single
suppliers of conservatories in terms of volume are Laird Lifestyle
and Burnden Group, both of which supply into the DIY multiples
sector, followed by the replacement window companies Anglian, Everest
and Bowater Home Improvements. These combined are thought to
account for around 20-22% of the market in terms of volume. Amdega,
which also markets the Portland brand, and David Salisbury are
leading suppliers in the high value specialist sector of the market. The
leading roof specialists include Ultraframe,
K2, Wendland
and Quantal, with window systems suppliers Synseal, Eurocell,
L.B Plastics and Rehau also strong in this sector.
Replacement window
companies remain the major distribution channel for conservatories,
accounting for an estimated 66% of sales by volume, though the sector is
very fragmented in itself and contains a wide range of retail
operations. This share has not changed significantly since 2001. The DIY
Multiples account for an estimated volume share of 20%, with Wickes and
B&Q the strongest players in the sector. The high level of price
competition in the DIY sector, and a greater focus on higher quality
products has resulted in some loss of value share for this sector in
recent years, though by volume its share has increased slightly.
Garden Centres and
Portable Building specialists have continued to see their share eroded
and now account for an estimated 7% of sales, compared to over 30% in
the early 1990s. Conservatory specialists, builders and other outlets
account for the remaining 7% of the market, though share by value would
be high given their much higher average retail prices. However, this
sector has grown in recent years and expanded in terms of the types of
companies now selling conservatories. There are now a large number of
conservatory specialists targeting the DIY market direct, through the
internet or catalogues, but offering a wider range of options than many
of the multiples.
Overall, the
prospects for the conservatory market in the longer term are favourable,
providing the economy remains strong and consumer confidence levels
improve. The appeal of conservatories remains high as a desirable
lifestyle product for many homeowners and the market appears to be far
from saturated. However, average growth rates will be lower than those
seen in previous years. | 
