DIY & Home Improvements (UK)

Executive Summary

DEFINITION

The definition of DIY used in this report is based on the definition in the official government publication Consumer Trends, produced by National Statistics:

"Decorators' and DIY supplies, including both self-assembly and ready-made kitchen units, sanitary equipment, sheet glass, paint, lighting, but excluding electrical fittings and accessories."

The definition includes DIY tools, but excludes garden tools, which are classed as hardware. Also excluded are plants and other garden products, carpets and hard floorcoverings, soft furnishings, bedlinen, bedroom furniture and housewares.

MARKET SIZE AND GROWTH

Consumer Trends showed that spending on DIY and home improvements increased by 7.2% in 2000, to £8.81bn at retail selling prices (rsp). Key Note expects expenditure to increase to £9.33bn in 2001. The market grew by 51.2% between 1996 and 2000, but growth in value has been slowing. Following the slump in the housing market after the last economic recession, the market benefited as consumers began to catch up on DIY jobs that had been deferred. This trend has now run its course and resulted in an inevitable slowdown in the growth rate.

The market experiences strong pressure on prices, as a result of fierce competition between the DIY superstore chains, and, in many product sectors, from low-cost imports. Between 1996 and 2000, overall price inflation was very low, and, at nearly 46.9%, growth in market volume almost matched value growth. In 1999, average prices actually fell.

PRODUCT SECTORS

Sections Four to Nine discuss the key markets — paint, woodcare, wallcoverings, glazed ceramic tiles, power tools, and hand and decorating tools — which account for around a quarter of the total market. Section Ten provides brief coverage of the remaining markets.

Paint

The retail market for DIY paint continues to give a strong performance. Value growth is outstripping volume growth, owing to buoyant sales of coloured paints, specialist paints (for surfaces such as metal, tiles, melamine, etc.) and high-quality one-coat paints. Sales of masonry paint fell slightly in 2000. Interest in paint effects continues, but the present emphasis is on careful choice of colour combinations, including strong, bold colour schemes, cooler more subtle schemes, and heritage colours. The launch of metallic colours has been greeted with enthusiasm.

The new colour ranges have been backed by heavy advertising from the leading brand manufacturers, and brands have gained market share at the expense of own-label products. The top three paint manufacturers supplying the DIY market are Imperial Chemical Industries (ICI), Akzo Nobel and Kalon. Kalon leads in own-label supply, as well as offering branded paints for the independent retail sector.

Woodcare

Woodcare has enjoyed several years of strong growth, although the rate of growth slowed in 2000. Garden products is the most dynamic sector. Sales of varnish, which remains the largest sector by value, showed a slight decrease, having suffered from the popularity of painted finishes. Leaders in the woodcare market are Ronseal (with the Ronseal and Colron brands), ICI (with Dulux and Cuprinol), and Akzo Nobel (with Sadolin).

Wallcoverings

The wallcoverings market has reached its lowest point for several years, owing to the popularity of painted walls. Manufacturers have reacted by producing innovative products such as dry-strippable and paste-the-wall wallcoverings, new textured patterns and metallic colours. The industry is confident that the worst of the slump is over and that an improvement will be apparent by 2002. However, the market downturn has taken its toll on the manufacturers and there have been several mergers. The largest of these was the merger between Vymura PLC and John Wilman Ltd in 2000. The other market leaders remain The Imperial Home Decor Group and Graham & Brown.

Glazed Ceramic Tiles

The prospect for the glazed ceramic tiles market remains one of long-term, gradual growth, especially in floor tiles. Compared with warmer European countries, the UK has a relatively small tiles market, leaving plenty of potential for growth. The consumer appeal of tiles has resulted in gradual market growth, but with some fluctuations. Imports dominate the market. There are three main UK manufacturers: H&R Johnson Tiles, Pilkington's Tiles Group and British Ceramic Tile, which is a new entrant.

Power Tools

The power tools market continues to give a strong performance. Sales have been driven by the development of multipurpose tools and product innovations that have made power tools lighter and easier to use, and have increased the power available from cordless tools. Drills still make up the largest sector, even though they have the highest household penetration. Volume growth exceeded value growth in 2000, because of the influx of cheap ranges manufactured overseas, such as Alba's Power Devil, which has been very successful. The market leader is Black & Decker, followed by Robert Bosch and Alba.

Hand Tools and Decorating Tools

Growth in the decorating tools sector has tended to follow that in paint, but value growth has not matched volume growth, as a result of an increase in low-cost imports. The leading brand is Mosley-Stone, made by The Stanley Works (trading as Stanley Tools). Others are LG Harris, Hamilton Acorn and Halls.

The hand tools sector is very mature and tends to follow growth in the wider DIY market. The leading competitor is Stanley Tools, but this sector supports many other players, including wholesalers' own brands.

CONSUMER RESEARCH

The results of original research for Key Note, carried out by BMRB Access, are shown in Section Two. Relevant research by BMRB International is included under the various product sectors in Sections Four to Nine.

The Access survey asked consumers about several DIY activities and found that results were rather lower than in a similar survey conducted 18 months previously. The most popular activity was indoor painting or woodcare, followed by wallpapering. DIY still has a strong male bias and DIY activity peaks in the 35 to 44 age group.

Respondents were also asked which sources of DIY advice and information they found helpful. The survey revealed that other members of the family were the leading source of advice — cited by 54% of respondents — followed by on-pack instructions (51%). However, there were some significant differences between the sources chosen by men and those preferred by women.

RETAILERS

The most significant changes to have occurred in the DIY market since the 2000 edition of this Market Review have been the acquisitions in the superstore sector. Following two unsuccessful bids, Focus Do It All acquired Wickes, and went on to acquire Great Mills, thereby reducing the number of superstore companies from five to three. The other two are B&Q and Homebase, both of which performed well in 2000/2001. Homebase was sold by J Sainsbury PLC to Schroder Ventures Ltd in March 2001.

Online shopping is fast becoming an important feature of DIY retailing, and Kingfisher's Screwfix was reported to be making good progress. B&Q continues to expand overseas and now ranks among the world's leading DIY retailers.

FUTURE PROSPECTS

Background economic trends remain favourable, but growth in the DIY market is slowing, and Key Note expects more gradual growth between 2001 and 2005. Assuming price rises continue to be moderate, DIY spending is forecast to reach £11bn, at current prices, by 2005.

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