Dulux Trade comment: Q4 2017

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

Quarter four delivered a mixed performance for decorative paint with December statistics showing a disappointing end to 2017. The retail market in particular was hit hard by weak consumer confidence and a downturn in housing transactions amongst other factors.

Focusing on Trade, the market performed better, finishing the year just short of 1% up over the previous year in terms of volume. However this was the weakest annual growth in the last five years.
By value, trade sales were up over 3%. However, this increase came from price rises from manufacturers rather than other market forces.

Overall the Trade paint market performance was influenced by many factors in 2017, especially exterior paint where the weather disrupted activity for part of the year. A far greater influence however has been a lack of confidence in the economy, and rather gloomy figures on construction output.
There are some positive tailwinds though to offset the headwinds: both disposable income and GfK’s Major Purchase Index are up a percentage point and unemployment is at its lowest in 42 years. The market though is volatile and uncertain.

A number of interesting trends are occurring in the paint world. Within the trim categories, the growth of water based coatings is outperforming solvent based coatings. That’s great news for appliers and their customers as it means lower odour, faster drying times and easier equipment cleaning. It’s also a strong sustainability message as there’s less impact on the environment.

A proportion of the market often specifies a ‘just good enough’ bare minimum rather than a higher performance product with additional customer benefits. So, it’s reassuring that sales of durable, scrubbable emulsions are growing faster than standard emulsions. This is important as it adds value back into the market, giving merchants the chance to trade up.

Along with volatility and uncertainty we’re seeing important market shifts. Merchants that focus on service, value for money and brand accessibility will attract the generalist, small builders and general contractors, who are the fastest growing part of the market.

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