Builders’ Merchants’ sales in the first quarter of 2020 reflect the negative impact of the COVID-19 pandemic as the UK Government introduces measures in March to contain the virus. Total value sales fell by -6.7% in Q1 2020 compared with the same period in 2019, with all core categories affected.
Year-on-Year sales were down in all three months, falling by -2.6% in January 2020 compared with January 2019, and by -1.3% in February 2020 compared with February 2019. Social distancing and lockdown measures introduced during March led to the largest decline of the quarter with sales down by -15.1% on March 2019.
Comparing the Q1 performance of different product categories versus Q1 2019, Tools (-12.7%) and Timber & Joinery Products (-11.1%) reported the biggest falls. Plumbing, Heating & Electrical (-7.4%), Heavy Building Materials (-6.5%), Decorating (-5.1%) and Kitchens & Bathrooms (-4.1%) were also down. Perhaps not surprisingly, the one outstanding performance was in Workwear and Safetywear up by +24.2%.
The quarterly BMBI index for Total Builders Merchants was 105.6, with Workwear & Safetywear ahead of all categories at 129.1. The Index for Heavy Building Materials was 104.8.
The BMBI uses GfK’s Builders Merchant Point of Sale Tracking Data which analyses sales-out data from over 80% of generalist builders’ merchants’ sales across Great Britain, making it the most reliable source of data for the sector.
Emile van der Ryst, Senior Client Insight Manager – Trade, GfK comments: “I remember reading a news 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 when things return to normal. For builders’ merchants this upside-down world became a reality towards 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,” continues Emile. “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.”
The BMBI is a brand of the BMF, with reports produced and managed by MRA Marketing. John Newcomb, BMF CEO adds: “As Donald Rumsfeld once said, there are known knowns, known unknowns and unknown unknowns. The first quarter of 2020 has certainly led us into “unknown unknowns” territory. 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.
“In the current circumstances 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’ merchants shut down completely when the lockdown took effect on 24th March.
“While sites begin a gradual return to work whilst maintaining enhanced safe working practices, demonstrating the construction industry’s desire to assist in the recovery of the UK economy, contractors report a slump in new orders and of projects being postponed. So we remain in the land of “unknowns” and it is far too early to say how long that recovery will take,” concludes John.
For the full Q1 2020 report, click here.