RANGE REVIEW: FLOORING & FLOORCARE
WOOD FLOORCOVERINGS SET FOR GROWTH
AMA Research looks at the UK flooring market, from key drivers to the impact of increasing international imports and rising costs.
T
he UK market for wood floorcoverings – which includes laminate, solid and engineered wood
flooring and accessories – currently accounts for an estimated 16% of the overall floorcoverings market, in value terms. It is now marginally the second-largest floorcoverings sector behind carpets; the main competition being the vinyl sector, where demand has been increasing for LVT in both the domestic and contract sectors. Market trends have generally been positive since 2011, with growth strengthening until 2016, buoyed by rising consumer confidence as the economy improved, as well as improvement in the housebuilding and wider construction sectors. However, the unexpected outcome of the Referendum vote, resulting in the decision to leave the EU, and a decline in the value of Sterling, have had an adverse impact on the wood floorcoverings market, slowing market growth to 1% in 2016, with a 2% increase estimated for 2017. Domestic DIY installations of wood flooring are still below pre-recession levels and seem unlikely to improve in the short to medium term, as consumers continue to be cautious about spending while increasingly turning to the professionals for more complex DIY tasks.
Rationalisation in UK market Laminate, the largest product category in this sector, continues to be a strong driver of growth in the overall wood floorcoverings market and has also become an increasingly popular choice in the commercial/contract sector. The solid and engineered woods sector has been slightly more volatile than laminate, and has seen slowing growth of 1% in 2016 with similar growth estimated for 2017, while the market for accessories, such as underlay, edging/jointing strips and glues, is not forecast to grow significantly in 2017. The rationalisation of production facilities away from the UK to lower-cost countries by larger global players, has been a critical factor in the increasing role of imports to the UK market. The percentage share of imports from the EU has risen significantly, from 45% in 2011 to 56% in 2016, while imports from Asia have fallen from 51% to 41% in that period. It is thought that there is now only one manufacturer of laminate with UK production facilities.
On trend Design trends have included the use of greater colour variations and mixed plank sizes to allow bespoke flooring installations, but also the use of texture and embossing to replicate features such as knots, ‘distressing’ and antique floors.
Value-added products with useful additional features, such as non-slip and water-resistant or waterproof flooring, have also helped stimulate demand. The distribution structure for wood floorcoverings in the UK is particularly complex, with a high degree of overlap between the domestic and contract end- use sectors. The market is also characterised by a high level of fragmentation, with manufacturers supplying the UK market directly through dedicated sales offices, as well as through independent distributors. DIY multiples are still the leading channel with an estimated 24% of the market, though this sector has seen a small decline in share in recent years. Brands within the DIY sector tend to be mainly own brand, although national brands are also stocked. Other significant channels of distribution for wood flooring are builders’ merchants and floorcovering independents.
Online channels
Sales via the internet have been increasing steadily in recent years, with the appeal based mainly on a lower cost structure and a customer base, consisting mainly of DIY enthusiasts, installation specialists and so on. Sales via this channel currently account for around 7% of sales.
Consumers also use of the internet to check on products available, to compare prices and plan purchases, and most retailers now have an internet presence and an increasing commitment to multi-channel retailing, including offering ‘click and collect’ facilities, a segment that is growing rapidly.
Growth ahead Forecasting is difficult at present, with the Sterling exchange rates likely to have more impact into the medium- term than has previously been the case, but the wood floorcoverings sector is forecast to show annual gains of around 2-3% in the period to 2021. Value growth is also likely to be stimulated by increase demand for FSC and PEFC certified timbers, as environmental considerations become more prominent in the specification process.
The housebuilding sector of the
construction industry is a key driver of demand for wood floorcoverings and current forecasts indicate more modest annual rates of growth for completions of 2-5% between 2017 and 2021. The private sector will continue to take a pivotal role into the medium term, but public sector completions growth could be underpinned by current housing policies, in particular, the stated objective by the government for an increase in direct commissioning of some new housing schemes.
More information is available in the report ‘Wood and Laminate Floorcoverings Market Report – UK 2017-2021 Analysis’, which is published by AMA Research. The report is available now and can be ordered online at
www.amaresearch.co.uk or by calling 01242 235724.
14 DIY WEEK 19 JANUARY 2018
www.diyweek.net
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