No recovery in retail until 2013, says Verdict
Published: 10 October 2011
Verdict retail practice leader Maureen Hinton painted a gloomy picture of the DIY, garden and housewares market, forecasting that tough times will persist for the next two years before recovery in a new 'low-growth environment'.
Ms Hinton gave Verdict's latest analysis of the state of the retail market when addressing members at the British Home Enhancement Trade Association (BHETA) DIY and Housewares Forum on October 5.
Her sobering overview described how retail sales growth in the DIY, garden and housewares industry has halved each decade over the past four decades, with the low price/high volume culture seen over the past decade now reversing with the return of inflation.
She added that difficult trading conditions have been made worse by falling consumer confidence, a flat housing market, and a 72% increase in non-store shopping, as the multi-channel retail culture "becomes the norm".
As a result, the DIY and garden market has experienced a £0.7bn drop in sales since 2008, with the decline in DIY far outweighing that of garden sales, which were boosted by the trend for grow your own.
The housewares market reported a £0.18bn fall in sales, with crockery and glass, small electrical items and bathroom and table linen listed as the hardest hit categories. Home baking, however, helped lift sales of other kitchen utensils.
Ms Hinton told members that the only really positive trends were a renewed customer appreciation of 'value' as opposed to 'cheap', and the increase in non-food space available in supermarkets. Winning retailers included Wickes and Wilkinson, as well as the major grocers.
Looking to the next four years, Verdict's analysis predicted that difficult times are likely to persist until 2013/2014, until the emergence of what the research company called the 'new normal' - defined as a low-growth environment, where wins come from taking market share from competitors rather than an overall expansion of the market.
Retail is expected to return to slightly better times and to this 'new normal', said Ms Hinton, when the housing market picks up in 2013 and disposable income recovers a little by 2014.
Meanwhile, online retail is predicted to grow its current 8.9% share of the overall retail market to 12% over the next four years, while m-commerce will hit 1% of retail sales for the first time.