Executive Summary
Sales through builders' merchants increased by an estimated 4.8% in 2000, to reach £8.98bn.
The market is broadly divided into three main sectors: heavyside (cement, bricks, drainage pipes, timber, roofing tiles, gravel, sand, etc.); lightside (internal fittings and materials for bathrooms, kitchens, heating, plumbing, etc.); and tools and tool hire.
Data on deliveries, stocks and overseas trade are given for the principal product categories. Owing to the importance of the construction industry to this market, background statistics are provided for new housing (output, starts and completions), private industrial and private commercial construction, and repair and maintenance work.
Having undergone a period of major consolidation, the builders' merchants market is now dominated by Jewson Ltd (owned by Saint-Gobain Building Distribution Ltd), Wolseley PLC and Travis Perkins PLC. Saint-Gobain and Wolseley have substantial overseas activities, while Travis Perkins is focused on the UK market. These top three companies each have total sales of over £1bn. Other leading companies include WTB Group Ltd, Jackson Building Centres Ltd and Buildbase Ltd (owned by Grafton Group PLC).
Private building contractors are the main target market for builders' merchants. The vast majority of these are small, employing seven or fewer staff, and over a third are located in London and the South East.
Builders' merchants face growing competition from DIY stores such as B&Q, Homebase, Focus Do It All and Wickes, for the small contractors market. As well as benefiting from a large and growing number of outlets, the DIY stores are increasing their numbers of large stores. They offer evening and weekend opening, as well as a broad range of products, which are displayed for easy product inspection and handling.
In an attempt to improve recruitment and training in the industry, a Certificate in Management (Builders' Merchants) has been launched as a means of developing a formal career path. This is important in the context of the whole construction industry, where many recruits are untrained, and a small, but notorious, element of unscrupulous contractors continue to attract media attention.
Key Note forecasts continued growth to 2005, although the rate of growth is expected to slow in 2002/2003. A further downturn is possible, depending on the longer-term impact the terrorist attacks in the US have on the financial markets generally, and the consequent effect this has on consumer confidence.
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