Nominal Uplift in Q4 Merchant Sales but Inflation Still Drives Growth

TOTAL VALUE SALES data from Britain’s Builders’ Merchants (BMBI) shows Q4 2022 recorded +2.9% year-on-year growth, with +16.4% price inflation compensating for volumes which fell -11.6%. With one less trading day this year, like-for-like value sales were +4.6% higher.

The BMBI report, developed and run by MRA Research, shows ten of the 12 categories sold more in Q4 2022 compared to the previous year with Renewables & Water Saving again growing the most (+48.6%). Plumbing, Heating & Electrical (+18.6%) and Workwear & Safetywear (+14.8%) both recorded their highest quarterly revenues and were among the nine categories growing faster than Merchants overall. Only Landscaping (-5.9%) and Timber & Joinery Products (-11.5%) sold less.

Comparing Q4 2022 with Q4 2019, a more normal pre-Covid trading year, sales for October to December 2022 were +24.4% higher than the same months three years ago. Volume sales were -7.6% down and prices were up +34.7%. All categories sold more including significant increases for Renewables & Water Saving (+59.3%), Landscaping (+32.2%), Timber & Joinery Products (+27.9%), and Heavy Building Materials (+25.9%) which all grew faster than total Merchants.

Q4 2022 Total Value Sales

Quarter-on-quarter, total value sales were -13.9% down in Q4 compared to Q3. Volume sales were -18.3% down while prices were up +5.4%. With five less trading days in the most recent period, overall like-for-like sales were -6.6% lower than Q3. Plumbing, Heating & Electrical (+13.2%) grew the most, followed by Workwear & Safetywear and Renewables & Water Saving (both +7.1%). Seasonal category Landscaping (-33.6%) was the weakest.

The report also shows total value sales dipped -1.7% compared to December 2021. Volume sales in December 2022 were down -17.9% and prices were up +19.7%. Taking trading days into account, like-for-like sales were +4.5% higher in December 2022, with one less trading day. Nine of the twelve categories sold more with Renewables & Water Saving (+42.3%) the strongest performing category. Plumbing, Heating & Electrical (+19.1%), Decorating (+12.1%) and Kitchens & Bathrooms (+10.0%) also did better, while Timber & Joinery Products (-15.4%) and Landscaping (-17.4%) both sold less.

Total value sales in December 2022 were +24.4% higher than the same month three years ago, with one more trading day this year. Like-for-like sales were +16.6% up. Volume sales were -10.9% lower and prices climbed +39.6%. All categories sold more, again led by Renewables & Water Saving (+60.5%).

Compared to the previous month, December 2022 total merchant sales were down -35.1% on November 2022. Volume sales were -38.3% lower and prices rose +5.3%. All categories sold less, which is in line with the seasonal trading patterns expected in December.

Mike Rigby, CEO of MRA Research

Mike Rigby, CEO of MRA Research, said: “Renewables & Water Saving products – one of the smaller categories tracked by BMBI – took off in Q3 2022, and has pretty much stayed in front as products which save energy or water are in high demand by trades and homeowners. With no end in sight to the astronomical energy bills which marred 2022 and a further review of the Energy Price Guarantee (which expires in April) due soon, there is a lot of uncertainty over what households will be paying for gas and electricity in 2023. Those with money in the bank are purchasing energy savings products to ease their utility bill woes.

“So far the economy has hovered on the brink of recession, and if the recession isn’t as deep as expected and inflation continues to fall, we may see a gradual return in consumer confidence. And perhaps an end to the permacrisis mindset that we’ve been locked in since 2020, which will be positive news for new building and RMI markets. But it has some way to go!

“Consumer spending is an important driver of the economy, so consumer confidence matters and GfK’s Consumer Confidence Barometer shows how far it has to recover. Confidence fell 3 points in January to -45, a near-historic low. That’s not surprising given how battered and bruised is a large section of the population. Interesting perhaps as an indicator of how the Haves, older homeowners who’ve paid off or nearly paid off their mortgages, are feeling, the Savings Index (which is not a component of the confidence index) is still positive at +14, just one point down on January last year. That’s some contrast with the precipitous drop in overall consumer confidence from -19 in January 2022 to -45 in January 2023. Whichever way you cut it, it’ll be a difficult year ahead.”

Download the Q4 2022 BMBI report here.


>> Read the Q3 2022 BMBI report in the news

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