Paul Roughan, Trade Merchants Sales Director Dulux Trade is BMBI’s Expert for Paint.
Quite a lot has happened since the last report!
The Conservatives won a comprehensive General Election victory leading to the UK leaving the EU in January. Whatever your feelings, are we all confident that at least decisions have been made and there is some certainty? Or does it lead to another 12 months of uncertainty and instability as we negotiate through the transition period?
The overall paint market grew last year with a stronger performance in the consumer channel than in trade. A word of caution on the consumer performance though as there was significant promotional activity, particularly in the last quarter, driven by the DIY sheds. We wait to see if this activity saw the market overheat or signified a real increase in consumer demand.
Trade market volume also grew, by 1.2% in 2019. This growth was driven by interior emulsions while masonry paints and external trim products declined over previous years. Unfortunately, though, the builders’ merchant channel under-performed against the total market with volume down as much as -8%.
Although we have seen market growth, volumes have been impacted by the flattening of house prices and less activity in the new build sector. However, new legislation offers opportunities in the rental sector. Rented accommodation has to be fit for human habitation, and this has been covered by legislation since March 2019. Decorating is a cost-effective way of transforming living spaces, so when landlords are refurbishing to meet legislation, merchants should make sure they sell them the paint too!
Linking to the above, there is significant insight from research on generalist merchant customers who also undertake painting as part of their projects. The insight shows a far higher percentage of these customers who have a consideration, or a need to buy decorative products, than are actually buying in a builders’ merchant.
Many buy elsewhere, believing that merchants don’t have the product ranges or competitive prices to fulfil their needs. It’s a huge opportunity for builders’ merchants to grow their share of the trade paint market by engaging with customers who are walking out their doors and going elsewhere for their decorative products.