THE DIY MARKET SUPPLEMENT 2019


Benchmark


THE UK DIY MARKET: LATEST TRENDS


Benchmark W


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© 2019 Datateam Business Media Ltd. DIY Week incorporates Decor Retailing, DIY Retail Leaders, DIY Superstore, Do-It-Yourself


Retailing, Domestic Electrical Appliances,


Excellence In Garden Retailing, Excellence In Woodcare Retailing, Excellence In Timber Retailing, Excellence In Tile Retailing, Garden Retail Leaders, Garden Retailing, Hardware Merchandiser, Hardware Trade Journal, Homecentre, Home Storage Retailing, The Ironmonger, Ironmongery & Hardware, Lighting, Martineau & Smith’s Monthly Circular, Mercantile Guardian, Superstore Management, Tools Retailing, and Wholesale Leaders. No part of this publication may be reproduced by any means without prior written permission from the publishers. Every effort is made to ensure the accuracy of material published in DIY Week. However, Datateam Business Media Ltd will not be liable for any inaccuracies. The views expressed by contributors are not necessarily those of the editor or publishers. DIY Week is registered at Stationers’ Hall. ISSN 0954-8823. DIY Week is printed on environmentally friendly paper; both text paper and cover stock are elementary chlorine free and sourced from paper suppliers with a well planned environmental policy. This issue of DIY Week includes some editorial photographs provided and paid for by suppliers. Printed by Buxton Press.


elcome to DIY Benchmark 2019: a detailed survey of UK DIY market trends, based on the latest fi led accounts of 20 of the country’s most signifi cant retailers of DIY products. As the Benchmark name implies, the intention is to identify the trading ratios achieved by the market’s most important players, and to track changes in those ratios and their signifi cance for the market as a whole. Our analysis includes total sales; year-on-year sales growth; profi tability and


margins at both gross and operating levels; operating effi ciency in the form of stockturn; staff productivity, expressed as salaries as a percentage of sales; shareholder benefi ts in terms of return on capital; and the unique DIY Week Index scores, based on what we consider to be the most important trading ratios. For DIY Benchmark 2019, we have identifi ed and analysed 20 retail businesses which clearly have


a signifi cant share of the total DIY market. First there are the obvious DIY specialists: B&Q, Wickes, Homebase and Taskers; pretty much everything they sell comes under the heading of DIY, so their inclusion in this survey doesn’t really require further comment. Screwfi x and Toolstation are more focused on the tradesman customer than on the DIYer, but they are undoubtedly taking an unspecifi ed share of the DIY market as well – and their rapid rate of growth means that their DIY share must be increasing. Topps, Tile Giant and Al Murad limit their share of the DIY market to tiles and tiling accessories, but they are very much consumer-facing rather than trade-facing businesses, so their inclusion is wholly justifi ed. Axminster has a similar position in the hand tool and power tool sectors. In the high street, Wilkinson and Robert Dyas remain signifi cant DIY players, even though much of


what they sell falls outside the defi nition of DIY. The same is true of the younger generation of out-of- town discounters: B&M, Home Bargains, and The Range. Their DIY ranges tend to be quite limited – but their sheer size and very rapid physical expansion more than justifi es their inclusion. Finally we have included a clutch of home interest retailers whose ranges include a signifi cant DIY


off er, and which have a substantial share of the market in their own geographical regions: Trago Mills in the south-west, Leekes in south Wales, Charlies Stores in mid-Wales and the borders, and Gardiner Haskins in the Bristol area. There is, of course, one huge (and deliberate) omission from the list: Amazon. We have deliberately


left the online giant out, simply because its accounting policies make any kind of meaningful analysis virtually impossible. Amazon UK Services Ltd, the main UK operation, declares sales, operating and pre- tax profi t, staff number and salaries – so we’re able to measure sales growth, the staff cost to sales ratio, and the operating and net margins. But the accounts don’t disclose the gross profi t or cost of sales, so it’s impossible to calculate gross margin or stockturn. Furthermore we have no idea what percentage of Amazon’s sales is attributable to DIY products, nor


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do we know how much is attributable to Amazon itself, and how much to third-party vendors selling on the Amazon platform. An independent source estimates third-party sales account for 31% of Amazon’s revenues, but it’s not clear whether that refers to 31% of all sales made on the Amazon platform, or if it means that the charges Amazon levies on third-party vendors account for 31% of its own revenues. All that can said with certainty is that over the past fi ve years, Amazon UK Services Ltd has shown


average annual sales growth of about 44% – a fi gure which emphasises the speed with which the retail market is changing. But the company’s accounts also show that over the same fi ve years, its salary bill has averaged just under 36% of sales. That’s far more than the average retail operation – the highest fi gure in the DIY Benchmark survey is Topps’ 24.4% – so either Amazon is being hugely generous to its staff (which doesn’t seem likely) or it’s making more sales in the UK than are recorded in the accounts of Amazon UK Services Ltd alone. We also decided to leave out Mano Mano, the ambitious French-based online operation – simply because it’s purely a platform for third-party vendors. It doesn’t actually sell any DIY products itself, and it holds no stock. While it’s undoubtedly true that it is having an eff ect on the sales of other DIY retailers, it is not a DIY retailer.


www.diyweek.net DIY WEEK THE DIY MARKET SUPPLEMENT 3


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