Builders Merchants to See Growth of 2-3% Annually
Builders’ merchants represent a key part of the UK construction industry and account for up to 85% of the UK’s […]
Builders’ merchants represent a key part of the UK construction industry and account for up to 85% of the UK’s built environment, by supplying a wide range of building materials. Builders’ merchants and their suppliers contribute over £40bn to the economy every year.
Builders’ merchants who are within the end-use sector have fared differently to other product sector areas over the last 5 years. Some experienced a sharper downturn in demand during the pandemic and subsequent lockdown rules that were imposed, however many received a much quicker rebound in sales once the lockdown measures were eased.
Many are still noting that this was due to many consumers having money saved during the pandemic and wanting to improve upon their living standards whilst spending so much time in their homes.
The main product sectors that saw a downturn during lockdown measures were kitchens, bathrooms, roofing and insulation products, HVAC equipment, plumbing and drainage products. These all experienced a double-digit decrease in market value during 2020. However, the downturn in sales was less evident for building materials such as timber and glazing, cement and plaster and bricks and blocks.
The number of overall outlets within the builders’ merchants’ sectors continues to shrink further. Online outlets should start to account for a greater share. For builders’ merchants, physical outlets will still remain a part of the central strategy, as consumers will still require items immediately or will want to physically see and touch items prior to purchase.
There will likely be more emphasis placed onto the online channels, such as apps, which will offer a better experience for trade customers, where they will be able to manage their own business account with the merchant.
In 2020, builders’ merchants accounted for 8.5% of UK construction output, up slightly from 8.2% the previous year. This was down to the reopening of builders’ merchants when many other stores were still closed during the height of the pandemic. Builders’ merchants were able to bolster the demand for construction projects as they resumed, even when they faced many struggles such as product shortages, notably timber and structural steel.
The pandemic caused the builders’ merchant’s market value to decrease by 11% in 2020. We are forecasting a steady recovery of 2-3% annual growth up to 2025. During this period, we are expecting to see more companies consolidate their networks.
Some will be moving from small branches which may have been underperforming at late, to a focus on larger outlets, in the hopes that they will be better suited to the modern consumer’s needs.
Source: DIY Week