Dulux Trade comment: Q3 2018

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

If the ‘Beast from the East’ was this year’s villain, the hero for decorative paint was the fantastic summer and early autumn weather which boosted many categories, particularly garden woodcare with volumes up more than 3%.

Although the predicted economic fallout from the Brexit negotiations has not yet materialised, consumer confidence is low. Housing transactions are lower than forecast and lower than last year. This impacts paint sales as there is a direct correlation between housing transactions and paint sales. Despite an increase in August volumes, driven by retailer promotion, the retail paint market is challenging.

Reviewing the trade market, the volume decline from the early poor weather is recovering compared to last year. Year to date, the market was down 0.8% overall in September, but Q3 volumes were up 2.5%. The masonry category performed particularly well – no surprise given the summer weather. Construction output continues to recover from a slow start to 2018, increasing 3% in the three months to August. This gives some optimism to the paint market for Q4 and beyond.

The emulsions category is by far the biggest in the trade market. Trends in emulsion sub-categories come from vinyl matt with volumes squeezed by contract and durable matt ranges. Contract is high volume, particularly from the house build sector, but lower value. Much needed added-value comes from the durable sector, focussing on specification rather than price. We expect to see more innovation and focus in this sub category.

Water-based finishes volumes for woodwork continue to grow but solvent-based finishes still dominate. The drive to innovate is focused on improvements in water-based technology. Our target is to achieve 50% water-based products by revenue in our wood finishes portfolio by 2020. As well as being better for the environment, water-based products are quicker drying, non-yellowing, lower odour, and safer to use.

Finally, in a further sign of the nervousness and uncertainty we’ve seen during the year, an increasing number of merchants are contingency planning for March 29th 2019. But, stockpiling in advance will put pressure on the supply chain.

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