Dulux Trade comment: Q1 2018

Paul Roughan, Trade Merchants Sales Director Dulux Trade , is BMBI’s Expert for Paint.

Performance in the first quarter of 2018 for decorative paint was certainly dominated by the ‘Beast from the East’! The weather had a serious impact with some merchants reporting at least four days of lost sales which are likely not to be recovered.

The general retail landscape continues to be under significant pressure. It is impacted by the growth of online shopping, soaring labour costs, business rates and a drop in consumer spending amid economic uncertainty. We eagerly await June 7th for the announcement from Wesfarmers on the future of Bunnings UK & Ireland.

The trade market has fared a little better than retail in Q1 but paint volumes still declined by 1.5%. Value increased in that period by 2.1%, but this increase has predominantly been driven by manufacturer cost price increases. The exterior paint category was also severely impacted by the weather conditions in Q1 with volumes significantly down. We have fingers crossed that the recent good weather continues.

Last quarter I reported on interesting trends in the paint market with the move to water based coatings in the trim categories. This trend continues along with the growth of premium, durable emulsions at the expense of standard emulsions. This is good news, demonstrating that the market is prepared to pay more for premium products that are longer lasting and more environmentally friendly.

One of the key growth sectors has been new build private housing. This sector grew last year by around 5% in the paint category. We are expecting it to suffer this year due to declining house prices across London and parts of the South East. This house price reduction is likely to spread to other parts of the country and as we know, housebuilders are less likely to build when prices are falling.

With Brexit now entering its detailed ‘real’ phase, uncertainty epitomises the market performance and forecasts.

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