ECONOMIC SNAPSHOT ECONOMIC SN ECONOMIC SN


SNAPSHOT


THE OPPOR TUNTIES ARE STRUCTURAL


The latest facts and figures fr om the British Home Enhancement T and what they mean for suppliers to the home improvement industry


Tr


speculated as to what effect two Bank holidays; warm weather and a royal wedding would do to May’s figures. Lo and behold, the month of May saw the quantity of retail sales up 1.3% with growth across all main sectors.


B


suggests that a sustained period of good weather and Royal W


Feedback from retailers We


Wedding


celebrations encouraged spending in food and household goods.


2019 to 2022. Ye


“All of this is positive and a summary of economic reports from Retail Economics predicts continued growth in retail at between 2% and 3% per year from Yet the disparity


et the


between these ‘official’ figur es and the relatively flat atmosphere in the High Street persists. On the one hand, the home improvement and housewar es markets struggle in the light of fewer house moves and the consequent r educed demand for home improvements and r efurbishments. On the other hand, the sector always benefits fr om an ‘improve, not move’ shift in consumer behaviour . In short, while all


positiv e


influences are of course welcome, every positive seems to be of fset by a downside. My conclusion is that whatever traditional influencers like holidays, house moves, weather and public celebrations do for the market, the r eal issues ar e the underlying structural changes in r etail and it is these on which we should be concentrating. We


Wear e seeing a r elentless shift towar ds online and the experience economy alongside inflexible leases, high rents and excess pr operties for many r etailers. This continued transition will demand flexible operating models and customer solutions


e ar data, integrated ‘tech’ such as social media, mobile apps, 14 DIY WEEK 20 JULY 2018 HETA home


impr ovement sector director Paul Grinsell says: “Looking at last month’s figures, I


ancement Trades As ment industry


y.. ssociation (BHETA) TA


data platforms and augmented reality are n ow the drivers of customer engagement and loyalty We are also seeing a change in the economic value consumers attach to material possessions. The experience economy will continue to compete against the traditional retail culture. Retailers must create memorable experiences that add value to the customer journey − experiences for which customers are willing to pay a premium. This pr opensity to prioritise spending on recreation and culture over commodity goods remains strongest across a younger consumer profile. Those millennials that pundits have been discussing for a while now are between 20 and 34 – of an age to value the creation of a ‘home’, whether they own it or not. To


ment and loyalty We y.. To


quote Goldman Sachs on millennials: “One of the largest generations in history is about to move into its prime spending years. They are poised to reshape the economy; their unique experiences will change the way we buy and sell, forcing companies to examine how they do business for decades to come.” “The home


enhancement


market needs to embrace these structural changes, incorporating digital and physical experiences into the customer journey as a of priority. These trends


matter of priority y.


will only grow in importance as millennials become more and mor e commercially significant. So, while we can welcome transient boosts to the market, with open arms for the additional sales they


undoubtedly bring, we r eally need to be addr essing more fundamental changes if we are to be a part of the growth trajectory predicted.”


Consumer Price Index – May 2018


The Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate was 2.3% in May 2018, up fr om 2.2% in April 2018. Rising motor fuel prices produced the lar gest upward contribution to the change in the rate between April and May 2018. There were also large upward effects fr om air and sea fares, which r ose between April and May this year but fell between the same two months a year ago, influenced by the timing of Easter.r. Par tiall y


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