Windfalls and property demand provide shot in arm for DIY sales
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Your support makes all the difference.Do-it-yourself retailers have enjoyed their best year since the 1980s housing boom, according to a new report by retail consultants Verdict Research.
The report predicts that the DIY market will grow even stronger over the next two years, boosted by building society windfalls and a buoyant housing market.
Verdict says that the value of spending on DIY last year reached its highest level since 1988.
It adds that the DIY market was worth pounds 10.9bn in 1996 and that growth outstripped all retail sales trends.
The report states: "The upturn in consumer spending and the housing market has made the outlook for the remainder of 1997 and into 1998 far better than at any other time this decade."
Verdict's Clive Vaughan added: "We think a lot of the windfall gains will be spent on enhancing properties, building extensions and so on. The whole building trade should benefit."
However, the report warns that the longer-term outlook is less certain due to rising interest rates and the possible demise of Miras, which was cut in the Chancellor's Budget last week. The report also warns of a potential north-south split as the southern housing market continues to boom.
The report backs up bullish sales trends announced recently by leading DIY groups such as B&Q. At the end of May B&Q said like-for-like sales in the 13 weeks to 3 May were 14.4 per cent ahead of the same period last year.
Verdict says that with the DIY market plagued by over-capacity these sectors would continue to polarise, with the large DIY chains expanding at the expense of lesser names and smaller independents.
The report shows that last year B&Q increased its share of the DIY market from 15 to 15.8 per cent, while Sainsbury's Homebase and Wickes also grew their share. Rivals with weaker brands, such as Do It All and Fads, saw their market share fall.
Percentage share of DIY market
1992 1993 1994 1995 1996
B&Q 14.6 15.0 14.9 15.0 15.8
Homebase 3.3 3.6 3.9 4.2 4.5
Texas 9.6 9.0 8.1 6.7 5.9
Wickes 2.8 3.0 3.8 4.5 4.9
Do It All 5.6 5.1 4.5 4.0 3.7
Great Mills 2.7 2.7 2.9 2.7 2.7
AG Stanley 1.5 1.5 1.3 1.3 1.1
Focus 0.6 0.8 1.2 1.2 1.2
Total 40.7 40.7 40.6 39.6 39.8
Source: Verdict on DIY Retailers 1997
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