RCI Column – Merchant sales collapse under COVID-19 lockdown

Merchant sales collapse under COVID-19 lockdown

April’s BMBI report is unlike any other. The Government enforced COVID-19 lockdown came late in March, so had a limited impact on the month. However, April took the full force, with many trades not working and most merchant stockists temporarily closing branches or providing a restricted service only for essential sectors or emergencies. As a result, this report contains unprecedented figures.

Year-on-year

Total Builders Merchants value sales to roofers, builders and contractors in April were down 76.3% compared with April 2019. All categories saw heavy falls, with Workwear & Safetywear least affected (-60.2%), and Tools (-90.0%) hit hardest.

Month-on-month

Total merchant value sales in April were 72.1% below March 2020, with two less trading days. Average sales a day, which removes trading day differences, were 69.3% lower overall than in March.

Other periods

Sales in the first four months of 2020 were 25.2% lower than in January to April 2019, with one more trading day this year. Workwear & Safetywear (+4.4%) was the only category that sold more – driven by strong demand for protective equipment in March.

Index

April’s BMBI index was 29.0 and all categories were well down. The lowest was Tools with an index of 10.0.

John Duffin, Director Keylite Roof Windows and BMBI’s Expert for Roof Windows, comments: “Roof window manufacturers saw a considerable drop in volume from mid-March until end of April. Only online sales saw real growth as “White Van Man” looked outside their usual supply chain to get materials to finish jobs and keep themselves in work.

“Keylite and other Roof Window Manufacturers remained open with warehouse skeleton staff, and SOP, Technical and Aftersales working from home. The weeks during lockdown gave us time to implement a new Group wide code of conduct and safe operating procedures so our great staff can restart safely and securely.

“Roof window manufacturers have the added complication of working to international guidelines which vary as much as our own regional governments, giving staff in Europe different advice and support, and managing logistics across international borders.

“Beyond the pandemic, 2020 will be about getting through, and positioning for better times, which unfortunately are 12 months away. I have conflicting thoughts on the RMI sector in 2020. Uncertainty surrounding job retention and the domestic and global economy will weigh on consumer confidence. Homeowners may put off extensions or renovations, and a stalled housing market (what will happen to house prices?) may suggest moving not improving. With question marks over foreign holidays, will homeowners spend on loft conversions instead? I suspect the answer is somewhere in the middle.

“As we come out of lockdown and back building, housebuilding will be a slow burner. It will be based on completing units sold pre-COVID, and completing units under construction, before a full return based on sales volumes.

“Finally, regardless of how you think the government handled this crisis, let’s ensure they remember NHS and other essential workers who put themselves at risk to ensure we got through! Applauding them is a great show of appreciation… but it doesn’t put food on their tables or buy them homes!.”

Download the April report here.

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Launched in 2015, the award winning monthly Builders Merchant Building Index (BMBI) report is the only reliable measure of repair, maintenance & improvement (RMI) activity in the UK. Filling an important gap, it can be widely used in construction, and by economists, Government, national media, commentators and influencers outside the industry.

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