Home Improvement Multiples Market Report - UK 2022-2026 - AMA Research

Home Improvement Multiples Market Report - UK 2022-2026

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The Home Improvement Multiples market continues to evolve to appeal to a younger demographic, with declining DIY skills and greater reliance upon professional supply & fit services.

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The Home Improvement Multiples market continues to evolve to appeal to a younger demographic, with declining DIY skills and greater reliance upon professional supply & fit services.

The style and look of the home is of paramount importance to this social media generation. The product portfolio is therefore adapting to reflect a greater focus on home decoration, not just home renovation.

Key Issues Covered in the Report

  • General Merchandise Retailers, offering highly affordable prices, continue to expand across Home Improvement categories, creating significant competition for B&Q, Wickes & Homebase.
  • Meanwhile, consumer behaviour is adapting, with increased penetration of online sales within the Home Improvement sector and demand for a more localized approach to store formats. Convenience remains an area of potential differentiation within this market.

Some of the companies featured:

B&Q, Wickes, Homebase, B&M Retail, The Range, Wilko, TradePoint, Robert Dyas, Maxwells

Areas of Particular Interest

  • The major players, B&Q, Wickes and Homebase have all adapted to provide a multichannel approach, with increased digital presence, as well as reviewing store size and locations.
  • The General Merchandise Retailers also have significant potential to expand market share in overlapping Home Improvement categories, including decoration and garden.

KEY AREAS COVERED IN THE REPORT

Market Overview

  • The Home Improvement Multiples market is influenced by diverse factors which include home ownership levels, the average size of properties and consumer confidence & spending levels.
  • Lifestyle changes can also impact significantly on this market, such as adaptation of properties to cater for the needs of multi-generational households, with younger people living at home for longer and demand for more ‘inclusive’ products for older family members, such as walk-in showers.
  • A further significant trend is the rise in the number of people Working from Home (WFH), accelerated by the pandemic, with demand for additional space.
  • With multiple channels competing for a share of this market, and with fierce price competition, the Home Improvement Multiples continue to evolve.
  • Our report provides insight into the key trends influencing this market, as well as prospects for the next 5 years to 2026.

Product Sectors

  • The report covers the following key categories within the Home Improvement Multiples market:
    • Outdoor & Garden (comprising horticultural, domestic landscaping, leisure, buildings & structures)
    • Decorating (including wall tiles)
    • Building supplies
    • Tools and hardware
    • Lighting & Electrical products (including Smart lighting)
    • Bathroom Equipment
    • Kitchens
    • HVAC & Plumbing Equipment
    • Floorcoverings & Floor Tiles
    • Windows, Doors & Conservatories
    • Furniture (including home offices & storage)
    • Home furnishings

Market Prospects

  • Market prospects for the Home Improvement Multiples market remain favorable and anticipate reasonable growth, despite the competitive marketplace.
  • Partnerships will play a major part in the development of this market, including potentially sharing space with retailers offering complimentary product portfolios, with in-store concessions and combined efforts to attract a broader range of customers.
  • Digital is also expected to continue to increase its penetration of sales within the Home Improvement market, with greater use of geo-locational services to target customers with local promotions. Click & Collect and fast home delivery services, remain critical to achieve competitive advantage.
  • The larger players will seek to differentiate by broadening their value-added services, from design advice to installation services, whilst strengthening contacts with local tradesmen.
  • Meanwhile, the price-driven General Merchandise Retailers, with overlapping categories, have potential to increase share in decoration, lighting, home furnishings and garden products and potentially with a wider selection of kitchen and bathroom furniture.

Supply and Distribution

  • The Home Improvement Multiples face increased competition from other channels, which includes Builders & Plumbers’ Merchants, who sell primarily heavyside materials, but who have also increased their share of lightside products, in a bid to attract homeowners.
  • Consequently, Home Improvement Multiples have in turn placed greater emphasis on servicing trade customers, blurring the lines between these two categories.
  • The leading players in the Home Improvement Multiples market are B&Q, Wickes and Homebase, which together are estimated to account for between 67-69% of the market.

The UK Home Improvement Multiples market increased by 6% during 2021, reflecting recovery from the impact of Covid-19. Some product categories experienced a sharper rise than others.

Our estimates include discount General Merchandise Retailers, where categories significantly overlap with B&Q, Homebase and Wickes; notably B&M Retail, The Range and Wilko.
Additionally, Home Furnishings is also included as a category, to reflect its growing importance within the Home Improvement Multiples. However, this category generally represents a much smaller proportion of turnover in the traditional DIY Multiples, compared to the discount General Merchandise Retailers.

The Home Improvement market faced challenging times in 2017/18, with fierce price competition, store closures and Homebase being sold, once again. However, after a period of restructuring and consolidation, the market has bounced back and performed comparatively well throughout the Covid-19 pandemic, although fortunes differ by product type.

CONTENTS

1. INTRODUCTION 7
1.1 CONTEXT 7
1.2 DEFINITIONS 7
1.2.1 Outdoor & Garden (gardening, domestic landscaping, leisure & structures) 8
1.2.2 Building supplies 9
1.2.3 Bathroom equipment 9
1.2.4 Decorating products & wall tiles 10
1.2.5 Tools, hardware & safety workwear 11
1.2.6 Floorcoverings & floor tiles 11
1.2.7 Kitchens 12
1.2.8 Furniture 12
1.2.9 Lighting & electrical 13
1.2.10 Replacement doors & windows and conservatories 13
1.2.11 HVAC & Plumbing Equipment 14
1.2.12 Home furnishings 15
1.3 ABBREVIATIONS 16
2. MARKET SUMMARY 17
2.1 MARKET SIZE 17
2.2 MARKET OVERVIEW 19
2.3 IMPORT/EXPORT 22
2.4 MARKET SPLITS 24
3. MARKET INFLUENCES AND DRIVERS 27
3.1 MAIN MARKET INFLUENCES AND DRIVERS 27
3.2 POLITICAL INFLUENCES AND DRIVERS 27
3.3 ECONOMIC INFLUENCES AND DRIVERS 28
3.4 SOCIAL INFLUENCES AND DRIVERS 30
3.5 TECHNOLOGICAL INFLUENCES AND DRIVERS 31
3.6 LEGAL INFLUENCES AND DRIVERS 33
3.7 ENVIRONMENTAL INFLUENCES AND DRIVERS 34
4. END USE SECTORS 36
4.1 RESIDENTIAL NEW BUILD 36
4.2. RESIDENTIAL REPAIR, MAINTENANCE & IMPROVEMENT (RMI) 40
4.3. SELF- BUILD MARKET 41
4.4. FORECAST OUTPUT OF THE RESIDENTIAL SECTOR 42
4.5. THE NON-RESIDENTIAL SECTOR 43
5. MARKET SUB SECTORS 44
5.1 MARKET STRUCTURE 44
5.2 CHANNEL SHARES 45
5.2.1. Home Improvement Multiples 46
5.2.2. General Merchandise Retailers With Overlapping Categories 51
5.2.3. Regional Players 54
5 2.4. Builders’ & Plumbers’ Merchants 56
5.2.5. Specialists 59
5.2.6. Online Sales 60
5.3. PRODUCT CATEGORIES 62
5.3.1 Outdoor & Garden 62
5.3.2. Building Supplies 63
5.3.3. Decorating Materials & Wall Tiles 65
5.3.4. Tools & Hardware 66
5.3.5. Lighting & Electrical Products 68
5.3.6. Bathroom Equipment 69
5.3.7. Kitchens 71
5.3.8. Heating, Ventilation & Air Conditioning (HVAC) 72
5.3.9. Flooring & Floor Tiling 74
5.3.10. Windows & Doors 75
5. 3.11. Furniture 76
5.3. 12 Home Furnishings 78
6. REGIONAL ANALYSIS 80
6.1. Regional Construction Trends 80
6.2. Regional Segmentation Of Home Improvement Retailers 81
6.3. Household Location By Region 84
6.4. Regional Developments By National Home Improvement Multiples 85
7. MARKET FORECASTS 88
7.1 MARKET PROSPECTS 88
7.2 TEN-YEAR MARKET VIEW (FIVE YEARS BACK, FIVE YEARS FORWARD) 88
7.3 OUTDOOR & GARDEN 89
7.4 BUILDING SUPPLIES 90
7.5. DECORATING PRODUCTS & WALL TILES 91
7.6. TOOLS & HARDWARE PRODUCTS 92
7.7. LIGHTING & ELECTRICAL PRODUCTS 93
7.8. BATHROOM EQUIPMENT 94
7.9. KITCHENS 95
7.10. HEATING, VENTILATION & AIR CONDITIONING (HVAC) 96
7.11. FLOORING & FLOOR TILES 97
7.12. WINDOWS & DOORS 98
7.13. FURNITURE 99
7.14. HOME FURNISHINGS 100
8. MARKET DYNAMICS 102
8.1. MARKET INHIBITORS 102
8.2. MARKET CATALYSTS 103
APPENDICES 104
APPENDIX A: ECONOMIC ENVIRONMENT 104
A.1 OVERVIEW AND OUTLOOK 104
A.2 GDP 104
A.3 INFLATION & INTEREST RATES 106
A.4 EMPLOYMENT & WAGES 107
A.5 HOUSEHOLD CONSUMPTION 108
A.6 STERLING 109
A.7 TRADE & BUSINESS INVESTMENT 110
RESEARCH SERVICES OFFERED BY AMA RESEARCH 111

TABLES AND CHARTS

CHART 1: UK HOME IMPROVEMENT MULTIPLES MARKET BY VALUE (£M RSP) 2017 – 2026 17
TABLE 2: BALANCE OF TRADE IN SELECTED MATERIALS, CURRENT PRICES (£000), QUARTERS 1-3, 2021 22
CHART 3: MARKET MIX BY CATEGORY WITHIN THE HOME IMPROVEMENT MULTIPLES MARKET, BY VALUE 2022E 24
TABLE 4: UK HOME IMPROVEMENT MULTIPLES MARKET PESTLE SUMMARY 27
TABLE 5: KEY ECONOMIC VARIABLES 2019 TO 2022 EST 29
CHART 6: UK HOUSEHOLD PENETRATION OF SMART HEATING CONTROLS (2018, 2020 AND 2025 FCST) 33
CHART 7: RESIDENTIAL CONSTRUCTION OUTPUT BY SUB-SECTOR, £BN, 2021 36
TABLE 8: TOTAL RESIDENTIAL STARTS AND COMPLETIONS (ENGLAND, WALES AND SCOTLAND) (000’S), 2016 TO 2021 38
CHART 9: HOUSE BUILDING COMPLETIONS 2007-2021 % MIX BY TYPE OF DWELLING 39
CHART 10: ESTIMATED NUMBERS OF UK HOUSEHOLDS BY SIZE, 2015 AND 2021, THOUSANDS 40
TABLE 11: UK RESIDENTIAL PROPERTY TRANSACTIONS, 000’S, 2017/18 TO 2020/21, SEASONALLY ADJUSTED 41
TABLE 12: OUTPUT OF THE UK RESIDENTIAL SECTOR, £BN, 2016 TO 2025 42
TABLE 13: INDICATIVE PRODUCT MIX BY CATEGORY, VOLUME %, 2022 45
TABLE 14: INDICATIVE RETAILER SHARE OF HOME IMPROVEMENT MARKET, VALUE % 2022 46
TABLE 15: B&Q LIMITED 49
TABLE 16: HHGL LIMITED 50
TABLE 17: HOMEBASE ROOMS LIMITED 50
TABLE 18: BUILDING SUPPLIES LIMITED 51
TABLE 19: B&M RETAIL LIMITED 53
TABLE 20: CDS (SUPERSTORE INTERNATIONAL) LIMITED 53
TABLE 21: WILKO LIMITED 54
TABLE 22: LEEKES LIMITED 55
TABLE 23: TRAGO MILLS LIMITED 56
TABLE 24: TRAVIS PERKINS PLC 58
TABLE 25: TOOLSTATION LIMITED 59
CHART 26: INTERNET SALES AS A PERCENTAGE OF ALL RETAIL SALES, JAN 2020 TO JAN 2022 60
CHART 27: INTERNET SALES AS A PERCENTAGE OF ALL HOUSEHOLD GOODS SALES, VERSUS OTHER CATEGORIES, 01/2020 VS 01/2022 60
CHART 28: SALES OF OUTDOOR & GARDEN (£M RSP) 2018 – 2022 62
CHART 29: SALES OF BUILDING SUPPLIES (£M RSP) 2018 – 2022 64
CHART 30: SALES OF DECORATING MATERIALS & WALL TILES (£M RSP) 2018 – 2022 65
CHART 31: SALES OF TOOLS & HARDWARE (£M RSP) 2018 – 2022 66
CHART 32: SALES OF LIGHTING & ELECTRICAL PRODUCTS (£M RSP) 2018 – 2022 68
CHART 33: SALES OF BATHROOM EQUIPMENT (£M RSP) 2018 – 2022 69
CHART 34: SALES OF KITCHENS (£M RSP) 2018 – 2022 71
CHART 35: SALES OF HVAC PRODUCTS (£M RSP) 2018 – 2022 73
CHART 36: SALES OF FLOORING & TILING PRODUCTS (£M RSP) 2018 – 2022 74
CHART 37: SALES OF WINDOWS & DOORS (£M RSP) 2018 – 2022 75
CHART 38: SALES OF FURNITURE (£M RSP) 2018 – 2022 77
CHART 39: SALES OF HOME FURNISHINGS (£M RSP) 2018 – 2022 78
TABLE 40: GB NEW RESIDENTIAL CONSTRUCTION, VALUE OF NEW ORDERS BY REGION, Q1-Q4,2018-2021 (£M) 80
TABLE 41: RESIDENTIAL CONSTRUCTION NEW ORDERS BY REGION, DECEMBER 2018-2020 (NUMBER OF UNITS) 81
CHART 42: NUMBER OF UK RETAIL ENTERPRISES SELLING HARDWARE, PAINTS & GLASS, 2018 AND 2021 82
CHART 43: REGIONAL SPREAD OF RETAIL ENTERPRISES SELLING HARDWARE, PAINTS & GLASS, ENGLAND, 2018 & 2021 83
TABLE 44: NUMBER OF ENTERPRISE (VAT/PAYE REGISTERED) BY REGION, 2021 84
CHART 45: NUMBER OF WORKING HOUSEHOLDS BY REGION, ENGLAND, OCT-DEC 2021, THOUSANDS 85
TABLE 46: UK HOME IMPROVEMENT MULTIPLES MARKET BY VALUE (£M RSP) 2017-2026 88
TABLE 47: OUTDOOR & GARDEN MARKET BY VALUE (£M RSP) 2017-2026 89
TABLE 48: BUILDING SUPPLIES MARKET BY VALUE (£M RSP) 2017-2026 90
TABLE 49: DECORATING PRODUCTS & WALL TILES MARKET BY VALUE (£M RSP) 2017-2026 91
TABLE 50: TOOLS & HARDWARE PRODUCTS MARKET BY VALUE (£M RSP) 2017-2026 92
TABLE 51: LIGHTING & ELECTRICAL PRODUCTS MARKET BY VALUE (£M RSP) 2017-2026 93
TABLE 52: BATHROOM EQUIPMENT MARKET BY VALUE (£M RSP) 2017-2026 94
TABLE 53: KITCHENS MARKET BY VALUE (£M RSP) 2017-2026 95
TABLE 54: HVAC MARKET BY VALUE (£M RSP) 2017-2026 96
TABLE 55: FLOORING & FLOOR TILES MARKET BY VALUE (£M RSP) 2017-2026 97
TABLE 56: WINDOWS & DOORS MARKET BY VALUE (£M RSP) 2017-2026 98
TABLE 57: FURNITURE MARKET BY VALUE (£M RSP) 2017-2026 99
TABLE 58: HOME FURNISHINGS’ SALES MARKET BY VALUE (£M RSP) 2017-2026 100
CHART A1: GROSS VALUE ADDED BY SECTOR 106
CHART A2: CPI INFLATION AND BANK OF ENGLAND BASE RATE 107
CHART A3: AVERAGE WEEKLY EARNINGS BY SECTOR 108
CHART A4: DISPOSABLE INCOME PER CAPITA & SAVINGS RATIO 109
CHART A5: STERLING EXCHANGE RATES TO THE DOLLAR AND THE EURO 109
CHART A6: TRADE & BUSINESS INVESTMENT, 2018-2020 110

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