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Recovery continues at Builders' Merchants | BUILDING MAGAZINE

Recovery continues at Builders’ Merchants

Sales at builders’ merchants across Great Britain continued to recover for the fourth quarter of 2020 after the shock of the second quarter.

Builders Merchants Federation (BMF) data show Q4 2020 sales surpassing 2019 levels. But despite government grants becoming available for home improvement works, there is not evidence of this translating into any upswing of sales for builders’ merchants. Sales of plumbing and heating materials actually declined.

The BMF’s Builders Merchants Building Index (BMBI) had previously reported a strong performance in Q3 with sales returning to near normal levels after April’s Covid lockdown for the sector. The positive overall trend continued in Q4 2020, with total builders’ merchants sales 5.4% ahead of Q4 2019 by vale, helped by an additional trading day.

The Q4 year on year increase was driven by strong performances in Landscaping (+22.9%), Timber & Joinery (+12.7%) and Heavy Building Materials (+4.3%). Sales value growth in Timber & Joinery was predominantly driven by Timber, with stock shortages a key driver.

Plumbing, Heating and Electrical (-6.0%) was the lowest performing product category in Q4 – despite the government’s Green Homes Grant Scheme opening on 30th September 2020.

There is normally a seasonal sales decline from Q3 to Q4 and 2020 was no exception. With five fewer trading days in Q4, total builders’ merchants’ sales were down by -10.8% compared to Q3 2020. The average sales per day figure for Q4 (-3.4%) was also down on Q3.

Taking 2020 as a whole, total sales was down by -10.7% on 2019. Given the public’s focus on their gardens during the first lockdown, it is no surprise that Landscaping was the only category to show an annual increase in sales value (+5.4%), with Workwear and Safetywear (-0.1%) the next best performer. The weakest annual results were found in the more lightside oriented categories with Tools (-20.2%). Plumbing, Heating and Electrical. (-19.1%, Kitchens & Bathrooms (-18.1%) and Decorating (-16.5%).

John Newcomb, BMF chief executive said: “Given widespread site closures both at the start of the pandemic and for extended Christmas shutdown periods, the continued year-on growth seen in the final quarter of 2020 provides a positive indicator of the building industry’s recovery. No doubt the Covid effect, including its impact on product availability, will be felt for some time to come. But the adaptability to enforced changes demonstrated by merchants and their trade customers over the past 12 month gives me a cautious degree of optimism for the coming year”.

The point of the sale data is collated for BMF by GfK. Emile van-der Tyst, GfK senior client insight manager, added: “A final review of this year highlights just how well the sector has bounced back. During Q2 the economic outlook for the remainder of 2020 seemed perilious, but a combination of RMI acitivity plus relaxed restrictions in Q3, followd by Brexit uncertainty combined with anticipated stock shortages in Q4 turned the ship. Taking all the above into consideration the final annual result of a -10.7% value decline seems a lot more palatable. 2021 now provides a realistic hope of a return to normality and an expected economic upswing”.