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BUILDER’S MERCHANTS


THE JOURNEY TO RECOVERY HAS STARTED


The Builders Merchant Building Index (BMBI) makes for significant reading for DIY industry professionals. DIY Week reports…


T


he Builders Merchant Building Index


(BMBI) Q1


report contains data from GfK’s Builders Merchants Panel,


which analyses data from over 80% of generalist builders’ merchants’ sales throughout the UK. GfK’s Builders Merchant Point of Sale Tracking Data sets a gold standard in reliable market trends. Unlike data from sources based on relatively small samples or estimates, or sales from suppliers to the supply chain, the data is based on actual sales from merchants to builders and other trades.


During the past few months due to the Covid-19 pandemic, statistics on the builder’s merchants and DIY industry have been particularly difficult to assess. However,


John


Newcomb, CEO of BMF, states why the organisations statistics are of significance during these unusual times. He takes up the story: “Due to the method of collection, we can be sure that the BMBI results are an accurate reflection of the period,” he says. “Whereas the estimates published this month by the Office of National Statistics (ONS) came with a caveat that they are subject to more uncertainty than usual as a result of the challenges they faced in collecting data during the coronavirus pandemic.” Overall, the BMBI assess that Q1 2020 was down by -6.7% in value, with all core categories affected. The shift becomes more evident comparing February to March figures for the two most recent years. In 2019, February to March saw an increase of 14.6%, but in 2020 a decrease of -1.9%. Heavy Building Materials was down by -6.5% from Q1 2019, with Bricks, Blocks and Insulation seeing the largest declines. Timber & Joinery saw an even


larger decline of -11.1 per cent, with Timber and Sheet Materials most affected and Cladding the only area that saw growth from 2019. Other noticeable market shifts include a -12.7 per cent decline for Tools, and


10 DIY WEEK JUNE 2020


a -7.4 per cent decline for Plumbing, Heating & Electrical. In the former, Power Tools is the driving factor behind the drop, while the latter has been negatively affected by both Plumbing and Electrical Equipment. One interesting shift was a 24.2 per cent growth in Workwear and Safety wear. “The first quarter of 2020 has certainly led us into “unknown unknowns”


territory,” explains


Newcomb. “Daily life in the UK, along with almost every other country in the world, changed radically as governments first acknowledged the deadly threat of Covid-19 and then struggled to find the right way to keep citizens safe and reduce its impact.” “Merchant sales figures revealed in


this report are the first results within our sector to reflect the negative impact of the Covid-19 pandemic and Government measures to reduce transmission of the virus. “In


the current


no-one will be surprised by these figures. They reflect a period when confidence dropped as coronavirus spread across the world to the UK and many building sites and builders’


INDUSTRY REFLECTIONS


“The Wienerberger Group closed the first quarter of 2020 with excellent results, continuing the successful course of the previous year despite the first negative effects of the COVID-19 pandemic. Digital has been one of the clear winners in this lockdown, as companies at all levels in the supply chain switched quickly to online communication.” Kevin Tolson, commercial director, Wienerberger UK


“In Q1 – a period that included a full week of lockdown – year-to-date retail sales volumes were up 10.8 per cent, while trade sales were down 6.6 per cent.” Paul Roughan, Trade Merchants sales director Dulux Trade


“Millions of homeowners have never spent so much time looking so long and so closely at their homes. The result is a surge of interest in improving them. If they can’t spend money on a holiday this year, they may spend it on their gardens. April’s traditional demand spike for all landscaping lines could be pushed back to August. We’re still not out of the woods, and nowhere near the turnover we need to support large staff numbers.” Malcolm Gough, group sales and marketing director, Talasey Group “Demand for mineral products declined in the first quarter of 2020. Adverse weather in February and the Covid-19 outbreak at the end of March contributed to the decline. The decrease in March was unprecedented with mineral product manufacturers reporting volumes 80 to 90 per cent lower than current run rates.” Andrew Simpson, packed products director Hanson Cement


merchants shut down completely when the lockdown took effect on 24 March.”


Newcomb himself, did thin that the ONS figures made for some interesting reading. “Nonetheless the ONS figures make interesting reading,” he says. “Total construction output fell by -2.6 per cent during Q1 2020 over Q4 2019, and by -3 per cent in Q1 2020 vs Q1 2019. A closer look reveals a poorer performance in RMI work, down -3.5 per cent this quarter vs Q4 2019 and by-6.0% vs Q1 2019. Drilling down further, Private Housing RMI work – a mainstay of builders’ merchants’ sales – fell by 14.6 per cent compared with Q1 2019, having dropped -18.6 per cent in March 2020 vs March 2019 and by -8.6 per cent vs February 2020. The decline in the first quarter reported by the ONS is the largest since data was first published in Q2 2012.”


circumstances


Despite this, Emile van der Ryst, senior client insight manager – Trade Gfk, takes a positive outlook on the future for the industry: Most people would agree that 2019 was a memorable year, mostly for the wrong reasons, as Brexit kept


dragging its feet,” he says. “The thought at the beginning of 2020 was a new year and decade would see some positive shifts in the Builders’ Merchant industry and a period of growth was ahead. “I remember reading


article at the beginning of January about the initial outbreak in Wuhan, when about 80 people contracted the Coronavirus. Four months later and we’re in an upside-down world that will never be the same again. “For builders’ merchants this upside-down world became a reality towards


a news


the end of March as a


nationwide lockdown was enforced. Sales come to a standstill overnight, with only essential deliveries done. “Projections for the remainder of 2020 are difficult to make, but we know there will be a significant drop in April sales. The next few months will be critical in determining how the industry adapts to the new “normal”. Online sales will continue to grow and start to play an even bigger role going forward. The journey to recovery has only just started, but the positive light in all of this is that the industry remains as resolute and determined as ever.”


www.diyweek.net


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