The overall trend in recent years has been positive, although the market experienced some difficulties in 2016 to mid-2017 which constrained growth. Early indications for 2018 are for a continuation of the modest recovery experienced from Q3 2017, although there is still a degree of restructuring activity, as major players adapt to changing conditions and a slowing of growth in some key end use sectors.
The plumbing and heating sector has faced challenges, and the major nationals have responded to difficulties in the underlying market by restructuring and streamlining their operations. This has included a significant number of branch closures, as well as the opening of new, more efficient style, outlets, the enhancing of online and/or multi-channel offerings, and a stronger focus on updating digital technologies. The focus on e-commerce has helped to offset some of the shift to internet-only distributors. Skills shortages remain critical and are a major concern in the plumbing and heating sector, with the skills gap said to be one of the biggest threats facing the UK’s plumbing industry. Small and medium businesses in particular are feeling the pressure.
The market, which comprises national, regional and local merchants, is dominated by four major merchant organisations. These firms operate via a number of subsidiaries, each supplying a range of plumbing and building products. The main competitors for the merchants are the home improvement retail and specialist outlets, as well as manufacturers and suppliers that deal direct with the construction trade. There has been strong competition from alternative suppliers, particularly online companies, retail outlets and DIY multiples. This is being driven by a shift in customers’ buying behaviour, with growing demand for online shopping via PCs and laptops as well as via mobile phones and tablets. For example, demand for facilities such as click & collect is rising.
Future prospects for plumbers’ merchants are relatively positive, although current political uncertainties surrounding the UK’s exit from the EU and the consequences in terms of trade, business investment and the availability of skilled labour are already affecting growth and will continue to do so in the short to medium term.