THE BACKGROUND
When it comes to disastrous DIY exploits, Laurence Llewelyn-Bowen and his ilk have a lot to answer for. However, DIY stores delighted in the surge in popularity of home-improvement TV shows in the early 90s, which, coupled with the high cost of hiring a professional to carry out the work, boosted consumer sales. In more recent years, the influx of Eastern European immigrants to the UK, offering quality workmanship at low prices, has tempted consumers away from DIY and, alongside the credit crunch, could be detrimental to retailers.
In the late 90s, many a homeowner experimented with stencils and Moroccan-inspired sitting rooms. Thanks, predominantly, to TV shows such as Changing Rooms, Britain became a nation of DIYers, keen to stamp their mark on their home using quick-fix solutions.
However, during the past few years, the decorating boom has slowed. People have become more reluctant to 'do it themselves' - perhaps put off by previous botched jobs - and are more likely to pay professionals to do it for them.
A number of factors have led to the growth in this 'do it for me' sector. A rise in disposable incomes coupled with the wider availability of cheaper high- quality labour has meant that paying someone to work on home-improvement projects has become a far more viable option.
As a consequence, the growth of the DIY retail market has been restricted. The sector has also matured, making it more difficult for retailers to build share. DIY has also become less of a leisure pursuit, resulting in spend in the market underperforming compared with overall consumer spending, growing at only half the rate.
In 2006, the DIY market was worth 拢25.5bn, equating to a spend of 拢421 for each person in the UK, rising to 拢26.9bn in 2007, according to Mintel. DIY retail specialist sales, excluding VAT, were estimated to have reached 拢9.2bn in 2007.
DIY products cover a broad spectrum, but those requiring fewer skills to apply, such as paint, are most popular.
In terms of products purchased, there is a distinct gender split; men are more likely to purchase tools and electrical items, while women buy soft furnishings and decorative products.
The ageing population is also a key demographic for this market as third-agers are more likely to own their home and have the spare capital necessary to embark on big projects.
Despite Kingfisher-owned B&Q leading the DIY retailers with a market share of almost 50%, the supermarkets are edging in on the specialists' territory. Consumer research suggests that almost 30% of shoppers are now happy to buy DIY products in a supermarket.
Nonetheless, nearly two-thirds of consumers continue to visit B&Q's stores and in 2006 its sales reached 拢3.9bn. The DIY retailer cemented its leading position with the roll-out of its warehouse format stores in the 90s, but as locations for such big outlets are difficult to come by, its expansion, and hence sales growth, have slowed and it is looking overseas for fresh opportunities.
B&Q has, however, added a mini-warehouse format to its offering. These outlets offer a reduced selection of lines, but benefit from requiring smaller plots of land for their set-up.
The retailer has also trialled a 'handyman' service, offering customers help with small tasks. The initial trial in two London stores was successful and has since been expanded to 25 outlets.
Homebase, which is positioned second in the sector, is chasing hard on B&Q's heels, having successfully increased its share over the past few years. It targets a more upmarket demographic and women.
Its owner, Home Retail Group, plans to open up to 15 more Homebase stores each year for the foreseeable future. This expansion programme was given a boost last October when it bought 27 stores from rival Focus DIY for 拢40m.
Homebase has embraced the trend toward eco-friendly goods, by emphasising water-conservation products under its Water Wise banner and logo. Its Eco Home campaign also highlights greener products. But the company has warned of a consumer slowdown, and last month announced it was reviewing its 拢27m ad account, held by Abbott Mead Vickers BBDO.
As the DIY market has slowed, the leading retailers have tried expanding their offerings. No longer focused on tools and hardware, most now also sell general home and garden products.
Wickes, which was bought by Travis Perkins in 2005, is the most notable exception to this, having retained its focus on the harder end of DIY and supplying the building trade.
DIY retailers have also looked toward a multiplatform approach with the top four retailers - B&Q, Homebase, Wickes and Focus - operating websites that enable customers to purchase online as well as in the stores; 11% of consumers have used the web to order DIY products in the past year, according to consumer research conducted by GfK NOP, up from 8% in 2005.
Looking forward, specialist DIY sales are predicted to rise by 14.4% between 2008 and 2012, taking the market to a value of 拢10.9bn, according to Mintel. However, any significant downturn in the UK economy or slowdown in the housing market would inevitably restrict growth, meaning this forecast would have to be revised.
TOP DIY RETAILERS BY SALES, OUTLETS AND SHARE
Company name Operation(s) Sales Outlets Share of
(pounds m) 2006/07 sales
2006/07 (%)
1 B&Q DIY superstores 3900 324 49.2
2 Homebase DIY superstores 1594 310 18.5
3 Wickes DIY superstores 849 179 9.8
4 Focus Group DIY superstores 702 251 8.1
5 Topps Tiles Tile Specialist 200 281 2.1
6 C Brewer & Sons Decorating/DIY specialist 105 109 1.2
7 Robert Dyas Hardware store 104 103 1.2
8 Arnold Laver Timber specialist 95 - 1.1
9 Floors-2-Go Flooring specialist 76 140 0.9
10 Mica Hardware store 63 167 0.7
11 Machine Mart Power-tools specialist 56 - 0.6
12 Hunter Douglas Window-products specialist 56 84 0.6
13 JH Leeke & Son Department store 53 4 0.6
14 Glyn Webb
Wallpaper Wall-coverings specialist 46 - 0.5
15 Mallett & Son DIY specialist 32 1 0.4
Source: annual company reports and accounts/Mintel
Sales figures exclude VAT
WHERE CONSUMERS SHOP FOR DIY PRODUCTS
Sep 07 Nov 03 Jul 99 % point
% % % change
1 B&Q 62 67 61 1
2 Homebase 37 40 30 7
3 Argos 28 34 28 0
4 Wilkinson Hardware 26 23 13 13
5 Garden centre/nursery 23 27 22 1
6 Wickes 22 26 20 2
7 Focus DIY* 21 28 - -
8 Tesco 20 - - -
9 Woolworths 19 25 23 -4
10 Asda 17 - - -
11 Builders merchant (eg Jewson) 14 16 13 1
12 Internet (eg Screwfix) 11 - - -
13 Department/variety store 7 13 11 -4
14 Paint and/or wallpaper specialist 5 7 8 -3
15 Mail-order catalogue/internet** 4 9 6 -2
Other DIY store 6 8 8 -2
Any other outlet 3 3 4 -1
Source: GfK NOP/Mintel
*including Do it All, Great Mills
**Mail order catalogue only in 2007
ANALYST COMMENT - FIZZAH KAZMI, INDUSTRY ANALYST, EUROMONITOR INTERNATIONAL
DIY sales are not what they used to be. While the credit crunch and recession fears have left consumers feeling less inclined to renovate their homes, the declining interest in shows such as Changing Rooms and the transition from 'do it yourself' to 'do it for me' also indicate that the industry's fortunes are on the wane. B&Q and Homebase have both reported a drop in sales, down 1.7% and 4.1% respectively in 2007.
However, the increased participation of women in the labour market, coupled with the rise of single-person households, has provided manufacturers with an additional demographic to target. Homebase, for example, has produced an ergonomically designed power tools range to suit those with slender hands, while other manufacturers have highlighted the use of essential oils, such as lavender, in their paints.
The aforementioned 'do it for me' trend has had a negative effect on the DIY market, though. The influx of cheap, semi-skilled labourers into the UK following the expansion of the European Union has met the desire of consumers for service, delivery and renovation projects at affordable prices.
A more female-friendly atmosphere could be the key to a revival, and an increase in female employees could be key to putting this demographic at ease in a rather alien environment.
The Thames Gateway, the Olympic Games and other regeneration projects may also buoy building merchants, producing a positive knock-on effect to the wider DIY sector. However, these rising trends pose a threat to its future.
With no significant signs of recovery, it will take more than a lick of paint to fix up the industry.