DIY Retailing - UK - February 2012

INTRODUCTION
What is a DIY store?
Financial definitions
Abbreviations
EXECUTIVE SUMMARY
The DIY sector size
Figure 1: DIY retailers’ sales (incl. VAT), 2006-16
The DIY market size
Figure 2: Spending on DIY goods (incl. VAT), 2007-11
Market factors
Squeezed consumers
Property market
Consumer spending
Figure 3: Compound annual growth rate in DIY-goods categories, 2007-11
Companies, brands, and innovation
Leading retailers’ performance
Figure 4: Leading DIY retailers’ sales growth, 2009/10-2010/11
Market shares
Figure 5: Leading retailers’ market shares, 2009-10
Innovations
Channels of distribution
Figure 6: Estimated distribution of DIY-goods spending, 2010 and 2011
Figure 7: Estimated distribution of DIY-goods spending excluding pets and goods for household maintenance, 2010 and 2011
Online
Figure 8: Estimated DIY-goods spending online (incl. VAT), 2010 and 2011
Figure 9: Estimated online sales by the DIY retail sector (incl. VAT), 2010 and 2011
The consumer
Where they shop
Figure 10: Where people shopped for DIY in the preceding 12 months, December 2011
What they want from a retailer
Figure 11: Factors considered important when deciding where to buy DIY products, December 2011
Attitudes to DIY online
Figure 12: Attitudes to buying DIY products online, December 2011
What we think
ISSUES IN THE MARKET
Do opportunities remain in a low-growth market?
How can retailers win share from competitors?
Which categories can drive growth?
Can DIY retailers take further spending from other sectors?
Surely online is a growth opportunity?
FUTURE OPPORTUNITIES
 TREND: INFLUENTIALS
 TREND: GREEN TECHNOLOGY
WHO’S INNOVATING?
Finding growth in a stagnant market
Figure 13: B&Q’s ‘Let’s Do It Together’ online hub
Figure 14: B&Q TradePoint zones
Exploring alternatives to the big-box store
Figure 15: Clas Ohlson store
Developing innovations
Launching new own brands
THE MARKET: ECONOMIC AND DEMOGRAPHIC BACKGROUND
Key points
Population forecast
Figure 16: UK: Over 65s as % total UK population, 1991-2020
The economy
Figure 17: UK: Quarterly GDP growth, 1991-2011 (Q3)
Figure 18: UK: GfK NOP Consumer confidence index, January 2007-December 2011
Figure 19: Percentage change in Retail Prices Index vs Earnings, 2008-11
Energy prices
Figure 20: Consumer prices inflation, electricity and gas, Jun 2010-Dec 2011
Housing market
Figure 21: UK: Average house price, 1992-2011 (Q4)
Figure 22: UK: House prices measured against the development of transactions, 2006-11 (Q3)
Figure 23: UK: First time buyers affordability index, 1985-2011 (Q3)
THE MARKET: CONSUMER SPENDING ON DIY PRODUCTS
Key points
 THE DIY MARKET
Figure 24: DIY retailers: Major markets, 2007-11
Figure 25: DIY retailers: Major markets at 2011 prices, 2007-11
THE MARKET: SECTOR SIZE AND FORECAST
Key points
Figure 26: DIY retailers sales, 2007-11
Figure 27: DIY retailers’ sales as % all retail sales, 1994-2011
Figure 28: Sales by DIY specialists relative to spending on key product areas, 2007-11
 FORECAST
Figure 29: DIY retailers sales, 2006-16
Figure 30: DIY retailers value and volume sales, 2006-16
Figure 31: DIY retailers sales as % all retail sales, 2006-16
THE RETAILERS: CHANNELS OF DISTRIBUTION
Figure 32: Estimated distribution of DIY-goods spending, 2010 and 2011
Figure 33: Estimated distribution of DIY-goods spending excluding pets and goods for household maintenance, 2010 and 2011
Competing specialists
Grocers
Figure 34: J. Sainsbury DIY homepage
Figure 35: Tesco Direct DIY homepage
Mixed goods retailers
Builders’ merchants
THE RETAILERS: LEADING RETAILERS
Key points
 THE BIG THREE
Big-ticket growth
Small-store expansion
Non-specialist retailers
Smaller and trade-balanced retailers
Figure 36: DIY retailers: Leading operators, 2010/11
THE RETAILERS: MARKET SHARES
DIY specialists’ market shares
Figure 37: Leading DIY retailers’ share of sector sales, 2009 and 2010
Adjusting for trade sales
Figure 38: Leading DIY retailers: Estimated trade share of sales, 2010/11
Figure 39: Leading retailers: Estimated sales and market shares excluding sales to trade customers, 2010/11
THE RETAILERS: ONLINE
Key points
 PROSPECTS FOR DIY ONLINE
 ONLINE DIY MARKET SIZE
Figure 40: Estimated DIY-goods spending online (incl. VAT), 2010 and 2011
Figure 41: Estimated online sales by the DIY retail sector (incl. VAT), 2010 and 2011
 CONSUMERS: WHAT THEY WANT ONLINE
Figure 42: Consumer attitudes towards buying DIY products, December 2011
 CONSUMERS: WHO’S SHOPPING ONLINE
Figure 43: Proportion of adult population buying DIY/garden products online in the preceding three months, Jul 2009-Oct 2011
Figure 44: Proportion of adult population buying DIY/garden products online in the preceding three months, by socio-economic group, age, gender and lifestage, Oct 2011
 CONSUMERS: ONLINE/OFFLINE SHOPPING PATTERNS
Figure 45: Shopping patterns for DIY/garden products, March 2011
 LEADING DIY RETAIL WEBSITES
Figure 46: Leading transactional DIY/ hardware/homewares retail websites, three-month average to November 2011
THE RETAILERS: RETAIL ADVERTISING AND PROMOTION
Key points
Strong growth in ad spend
Figure 47: Main media advertising spend, by leading DIY retailers, 2008-10
Spending relative to turnover
Figure 48: Leading DIY retailers’ advertising spending as % of turnover, 2008-10
Spending by media
Figure 49: Leading DIY retailers’ main media advertising distribution, by media, 2010
Major campaigns
THE CONSUMER – BRAND RESEARCH
Brand map
Figure 50: Attitudes towards and usage of brands in the DIY retail sector, December 2011
Correspondence analysis
Brand attitudes
Figure 51: Attitudes by DIY retailer brand, December 2011
Brand personality
Figure 52: DIY retail brand personality – macro image, December 2011
Figure 53: DIY retail brand personality – micro image, December 2011
Brand experience
Figure 54: DIY retail brand usage, November 2011
Figure 55: Satisfaction with various DIY retail brands, December 2011
Figure 56: Consideration of DIY retail brands, December 2011
Figure 57: Consumer perceptions of current DIY retail brand performance, December 2011
Figure 58: DIY retail brand recommendation – Net Promoter Score, December 2011
Brand index
Figure 59: DIY retail brand index, December 2011
Figure 60: DIY retail brand index vs. recommendation, December 2011
Target group analysis
Figure 61: Target groups, December 2011
Figure 62: DIY retail brand usage, by target groups, December 2011
Group One – Conformists
Group Two – Simply the Best
Group Three – Shelf Stalkers
Group Four – Habitual Shoppers
Group Five – Individualists
THE CONSUMER – WHO DOES DIY AND WHERE DO CONSUMERS SHOP?
Key points
 WHO DOES DIY AND WHERE DO THEY SHOP
DIY losing popularity
Figure 63: Home decorating or other DIY work in the last 12 months, 2006-11
Figure 64: Home decorating or other DIY work in the last 12 months, by main demographic group, 2009-11
Figure 65: Trends in agreement with DIY and home, GB, 2005-11
Figure 66: Profile of attitudes to DIY and the home, 2011
Where do people buy DIY?
Figure 67: Where people shop for DIY, December 2011
Figure 68: Profile of DIY store customers, December 2011
Figure 69: Profile of DIY store customers for B&Q, Homebase and Wickes, December 2010-December 2011
Outlets used
Figure 70: Repertoire of DIY retailers bought from in last 12 months, December 2011
Figure 71: DIY retailers bought from in last 12 months, by repertoire of DIY retailers bought from in last 12 months, December 2011
THE CONSUMER – FACTORS BEHIND CHOICE OF DIY STORE
Key points
Figure 72: DIY important factors when deciding where to buy DIY products, December 2011
Figure 73: Profile of the consumers factors when deciding where to shop for DIY products, December 2011
Figure 74: DIY retailers bought from in last 12 months, by factors when deciding where to shop, December 2011
THE CONSUMER – CONSUMER ATTITUDES TO BUYING DIY ONLINE
Key points
 ATTITUDES TO BUYING DIY PRODUCTS ONLINE
Figure 75: Attitudes to buying DIY products, December 2011
What consumers want online
Figure 76: Attitudes to DIY online, December 2011
Multichannel services in demand
Figure 77: Attitudes to shopping for DIY products online, December 2011
Other online potential
Figure 78: Attitudes to shopping for DIY products online, December 2011
CLAS OHLSON
Figure 79: Clas Ohlson: Sales as share of DIY retailers’ sales in Europe, 2006-10
Strategic evaluation
Figure 80: Clas Ohlson: Sales growth in major markets, 2006/07-2010/11
Figure 81: Clas Ohlson: Operating margin development, 2005/06-2010/11
Background
Company performance
Figure 82: Clas Ohlson: Sales performance, 2006/07-2011/12
Figure 83: Clas Ohlson: Outlet data, 2006-11
Store formats
Retail offering
e-commerce and home shopping
HOMEBASE
Figure 84: Homebase Ltd: Sales as share of DIY retailers’ sales in UK, 2006-10
Strategic evaluation
Background
Company performance
Figure 85: Homebase Ltd: Group financial performance, 2006/07-2010/11
Figure 86: Homebase Ltd: Outlet data, 2006/07-2010/11
Sales mix
Figure 87: Homebase Ltd: Breakdown of sales, by category, 2010/11
Figure 88: Homebase Ltd: Breakdown of sales, by category, 2007/08-2009/10
Consumer profile
Figure 89: Homebase shoppers in last 12 months, by gender, age and socio-economic group, December 2011
Figure 90: Homebase shoppers in last 12 months, by region, December 2011
Figure 91: Homebase shoppers in last 12 months, by ACORN group, December 2011
Retail offering
e-commerce and social media
Figure 92: Homebase: Online customer profile, three-month average to November 2011
KINGFISHER GROUP (UK)
Figure 93: Kingfisher Group: Sales as share of DIY retailers’ sales in UK, 2006-10
Strategic evaluation
Background
Company performance
Figure 94: Kingfisher Group: European revenues, by country/operation, 2010/11
Figure 95: Kingfisher Group: Group financial performance, 2006/07-2010/11
Figure 96: Kingfisher Group: European stores, by country/operation, 2010/11
Figure 97: Kingfisher Group: Outlet data, 2007-11
Consumer profile
Figure 98: B&Q shoppers in last 12 months, by gender, age and socio-economic group, December 2011
Figure 99: B&Q shoppers in last 12 months, by region, December 2011
Figure 100: B&Q shoppers in last 12 months, by ACORN group, December 2011
Retail offering
Figure 101: B&Q: Sales breakdown, by category, 2010/11
Figure 102: Kingfisher UK, trade’s proportion of retail sales, 2010/11
e-commerce and social media
Figure 103: B&Q (UK): Profile of visitors to DIY.com, three-month average to November 2011
WICKES/TRAVIS PERKINS RETAIL
Figure 104: Travis Perkins Retail: Sales as share of DIY retailers’ sales in UK, 2006-10
Strategic evaluation
Background
Company performance
Figure 105: Travis Perkins Retail: Group financial performance, 2006-10
Figure 106: Travis Perkins Retail: Outlet data, 2006-10
Figure 107: ToolStation UK: Group financial performance, 2006-10
Figure 108: ToolStation UK: Outlet data, 2006-10
Consumer profile
Figure 109: Wickes shoppers in last 12 months, by gender, age and socio-economic group, December 2011
Figure 110: Wickes shoppers in last 12 months, by region, December 2011
Figure 111: Wickes shoppers in last 12 months, by ACORN group, December 2011
Retail offering
e-commerce and home shopping
Figure 112: Wickes: Profile of online shoppers, three-month average to November 2011
APPENDIX – BROADER MARKET ENVIRONMENT
Population
Figure 113: Europe: Population, by age group, 2005
Figure 114: Europe: Population, by age group, 2010
Figure 115: Europe: Population, by age group, 2015
Figure 116: Europe: Population, by age group, 2020
GDP
Figure 117: Europe: GDP (current prices), 2010
Figure 118: Europe: GDP growth rates (current prices), 2001-Q3 2011
Figure 119: Europe: GDP growth rates (constant prices), 2001-Q3 2011
Consumer spending
Figure 120: Europe: Households’ consumer spending (current prices), 2010
Figure 121: Europe: Households’ consumer spending growth rates (current prices), 2001-Q3 2011
Figure 122: Europe: Households’ consumer spending growth rates (constant prices), 2001-Q3 2011
Consumer prices
Figure 123: Europe: Harmonised index of consumer prices, 2001-10
Unemployment
Figure 124: Europe: Average rate of unemployment, 2001-10
Interest rates
Figure 125: Europe: Interest rates, 2005-Q4 2011
Consumer confidence
Figure 126: Europe: Consumer confidence, Feb 2011-Jan 2012
Home ownership
Figure 127: Europe: Levels of home ownership, 2006-10
APPENDIX – BRAND RESEARCH
Figure 128: Brand usage, December 2011
Figure 129: Brand commitment, December 2011
Figure 130: Brand momentum, December 2011
Figure 131: Brand diversity, December 2011
Figure 132: Brand satisfaction, December 2011
Figure 133: Brand recommendation, December 2011
Figure 134: Brand attitude, December 2011
Figure 135: Brand image – macro image, December 2011
Figure 136: Brand image – micro image, December 2011
Figure 137: Profile of target groups, by demographic, December 2011
Figure 138: Psychographic segmentation, by target group, December 2011
Figure 139: Brand usage, by target group, December 2011
Brand index
Figure 140: Brand index, December 2011
APPENDIX – THE CONSUMER – WHO DOES DIY AND WHERE DO CONSUMERS SHOP?
Figure 141: Where consumers have purchased most popular DIY products in the last 12 months, by demographics, December 2011
Figure 142: Where consumers have purchased next most popular DIY products in the last 12 months, by demographics, December 2011
APPENDIX – THE CONSUMER – FACTORS BEHIND CHOICE OF DIY STORE
Figure 143: Factors important to you when deciding where to buy DIY products, by demographics, December 2011
APPENDIX – THE CONSUMER – CONSUMER ATTITUDES TO BUYING DIY ONLINE
Figure 144: Most popular consumer attitudes towards buying DIY products, by demographics, December 2011
Figure 145: Next most popular consumer attitudes towards buying DIY products, by demographics, December 2011