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The kitchen and bathroom
distributors’ market was estimated to be worth £772 million at
distributors’ selling prices at the end of 2008. Towards the end of
2007 and into 2008 the market deteriorated as increasing global
financial instability restricted borrowing levels and eroded
consumer confidence. In 2009, the housing market is likely to
continue to decline, albeit at a slower rate, as unemployment rises
and consumer confidence falls. In the medium to longer term the
economy should improve, and the housing shortage will lead to
increased levels of construction and subsequently higher demand for
kitchen and bathroom products.
The distributor market
has consolidated in recent years with larger distributors gaining
share through acquisitions. 2007 and 2008 saw a number of regional
distributors expanding their customer base and extending
distribution areas. National distributors now account for over 70%
of the market, with large regional distributors making up the
majority of the rest of the market. National distributors include
the PJH Group, BCG (Part of Wolseley), Mark Two and Waterline.
Regional companies include Robert Lee, Uptrend, Cooper Callas and
Scorpion.
A large proportion of
the distributors’ sales are bathroom products, with 38% of sales
falling into this category. Kitchen furniture has a 28% share
whilst showers and kitchen appliances each account for 16% of the
market.
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Kitchen and bathroom
specialists dominate the kitchen and bathroom distributors’ sales.
Builders’ merchants are also a key customer. Other customers
include DIY Outlets, other retailers such as department stores,
electrical independent retailers and sub contractors and end users
such as local authorities.
The Kitchen and Bathroom Specialists tend to operate in
the upper end of the market, which can be susceptible to fluctuations in
the economy. As a result, it is likely that in spite of strong
performance in recent years and support from the more mature demographic,
this sector will experience a decline in the short tem. The Builders’
Merchants are also likely to struggle in the current economic climate as
the housing market stagnates and construction levels drop dramatically.
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