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The essential news source for the home improvement industry TILES & TILING SPECIAL


16 JUNE 2017 Top trends, retailer profiles and sales tips p6


INSIDE THIS WEEK


INDEPENDENT FOCUS Our quarterly look at what’s impacting the indie sector p15


BIRA CONFERENCE Coverage from the event and the key issues discussed


p16


ECONOMIC SNAPSHOT What the latest figures mean for the HI industry


p25 WWW.DIYWEEK.NET Retailers gear up for “tough few months”


By Susan Deane In light of the recent election results alongside current inflation figures, British retailers have been left feeling uncertain about their future. When consumers perceive their financial position is threatened, they often hold back from making big-ticket purchases and this will have an impact the home improvement market. The latest figures from the


Office of National Statistics reveals that Consumer Price Index (CPI) inflation was 2.9% over the 12-month period to May (up from 2.7% in April).


NIESR head of UK


macroeconomic forecasting Amit Kara said: “We expect inflation to rise further over the course of this year and to reach a peak in the final quarter of 2017. This spike in inflation will exert further downward pressure on real


household disposable income at a time when wage growth remains modest and in turn squeeze consumer spending.” It’s not surprising then that


many retailers are concerned about what the coming months will bring. Vin Vara who owns the Tool Shop chain based in central London told DIY Week that he is worried about the toll recent events are taking on consumer spending habits: “There was uncertainty already with the Brexit talks and the election results have dented consumer confidence even more. Rather than taking one step forward and two steps back, it’s a case of five steps back.”


He continued: “Consumer spending is down compared with this time two years ago. We seemed to get over the original Brexit fears and settled down


a bit but now the future looks very uncertain; it all depends on who leads the talks, how the government deals with its internal problems. We are based in central London so the added concern for us is security and whether consumers will be put off by the recent terrorist attacks. No one really knows how things will pan out; it’s very difficult to forward plan and we are taking things week by week. The next few months will be tough for retailers generally, and DIY and hardware in particular, as spending on home improvement is not the greatest priority.” CEO of the British Independent Retailers Association (BIRA) Alan Hawkins, spoke on behalf of the association’s 6,500- plus members: “Consumer confidence is waning. They are spending less, which, of course, is bad news for retail. However,


from everything we are hearing anecdotally from members, this negative effect has been brewing from start of this year; the election result has served to exacerbate this gradual deterioration in confidence. “In March this year 51.9% of members were found to be reasonably confident but overall


sales performance was negative; the results of our next survey are due out in early July and it will be interesting to see how much that figure changes. DIY and hardware sales were down -3% in March, slightly worse than other retail sectors so the reality is that the situation will continue to be difficult for some time yet.”


Consumer spending falls for first time in four years


New data has signalled a renewed fall in consumer spending during May, with expenditure down -0.8% on the year. The decline followed a +0.3% increase in April, and was the first fall in household expenditure recorded since September 2013. The figures from the Visa


UK Consumer Spending Index revealed that clothing & footwear and household goods were amongst the weakest performing sectors during the month, with declines of -5.3% and -4.1% respectively. The late timing of Easter is likely to have had an impact on figures, says Visa, while a look at the


retail channels found that face- to-face spending marked the quickest drop since April 2012, down -5.3%. E-commerce, on the other hand, posted a +6.9% rise in spend after a marginal fall in April (-0.3%). Visa MD UK & Ireland, Kevin Jenkins commented: “Our Index clearly shows that, with rising


prices and stalling wage growth, more of us are starting to feel the squeeze. Retailers of non- essential goods were among the worst hit, with clothing and household goods seeing sharp declines in sales. The experience sectors continued to record some growth, though at much softer rates, suggesting


consumers were reining in their discretionary spending. “Bricks-and-mortar retailers had a particularly challenging month, with sales dropping at the quickest level in over five years, at a time when warmer weather and the May bank holidays would usually drive shoppers on to the high street.”


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For more information, contact your Draper representative or call our Sales Hotline on: 023 8049 4333 or visit drapertools.com/become-stockist


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