Dulux Trade Comment: Q2 2021

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

Q2 was really quite dynamic with manufacturing acquisitions alongside a number of merchant acquisitions. That instils some much-needed confidence into a market that, as in Q1, continued to feel the impact of extended product lead times, raw material and packaging shortages, on top of increased shipping and freight costs.

In addition to supply issues, there is a need for more skilled labour compounded by a large number of Eastern Europeans returning home after Brexit and lack of work during Covid lockdowns.

Trade paints demand is strong, however there is mixed feedback from paint appliers on their work pipeline. Some have many months, others a couple of weeks. In June, the ping-demic impacted appliers unable to enter clients’ homes.

The ending of the stamp duty freeze helped drive house prices up by around 9% over the last 12 months according to several sources. A healthy housing market drives additional decorating work.

At the mid-year point, the Trade paint market is some 2m litres above 2019. This is below forecast but is likely due to supply constraints across the industry. However, volumes are significantly higher than this time last year when merchants and appliers were still trying to adapt to trading in a Covid world.

Q2 is the peak time for paint, particularly the exterior category, but the first six months show a significant slowdown. We don’t believe this under-indexing against the overall market is weather driven as Q2 was broadly comparable versus last year. More likely it is jobs carried out in 2020 that have been brought forward.

Tinted paint is an important category in the Trade paint market. It accounts for 25% of Trade Market volume, but as much as 50% of value. In contrast, within the retail channel only 8% of volume comes from tinted paint. Colour accuracy to the colour chip is a really important factor for appliers. So, for merchants who have tinting machines, don’t be afraid of colour. Be really familiar with what you can offer. Keep the tinting machines in good working order. If you showcase colour and drive new footfall into store, there are good margins to be had.

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