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DIY Retailing - UK - May 2018

“Pressure is mounting on the DIY sector, with spending becoming increasingly fragmented and shifting from specialists to non-specialists. The pressure comes from external sources, including the shift away from home ownership, slowing activity in the housing market and increasing competition, but also internal ones such as the disruptions caused by Bunnings’ acquisition of Homebase and to B&Q by the ONE Kingfisher transformation plan.”
– Thomas Slide, Senior Retail Analyst

This Report looks at the following areas:

  • Where next for Bunnings and Homebase?
  • Specialists battling an increasingly fragmented market
  • Is there a future for the big-box store?

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • The market
            • Specialists sales fall 1.9%
              • Figure 1: Total DIY/hardware specialist sector size (including VAT), 2012-22
            • Declining sales through the big-box retailers accelerates
              • Consumer spending on DIY categories increases
                • Figure 2: Consumer spending on DIY products, annual percentage change, 2012-17
              • Fewer people are moving
                • Figure 3: Housing transactions completed in the UK valued at £40,000 or above, percentage change over 12 months, 2009-17
              • DIY specialists account for two thirds of spending
                • Figure 4: DIY products*, estimated channels of distribution, 2017
              • Online sales hit £1.6 billion in 2017
                • Figure 5: Online market for DIY products, 2013-17
              • Companies and brands
                • Travis Perkins overtakes Bunnings/Homebase
                  • Non-specialists continue to make up ground
                    • Kingfisher accounts for just under a quarter of all spending on DIY
                      • Figure 6: Leading retailers, estimated share of all DIY spending, 2017
                    • Kingfisher brands stand out from the rest
                      • Figure 7: Key metrics for selected retailers, April 2018
                    • Advertising spend falls 4.3% in 2017
                      • Figure 8: Recorded above-the-line, online display and direct mail total advertising expenditure by UK DIY retailers, 2014-17
                    • B&Q targets digital engagement
                      • The consumer
                        • 74% undertook a home improvement project in the past year
                          • Figure 9: Project undertaken in the last 12 months, March 2018
                        • Women improve while men maintain
                          • Figure 10: Reasons for undertaking DIY/home improvement projects in the past year, March 2018
                        • A quarter are already planning their next DIY project
                          • Figure 11: DIY/home improvement plans for the next 12 months, March 2018
                        • Half have shopped at B&Q in the past year
                          • Figure 12: Where they shopped for DIY products in the past year, March 2018
                        • Satisfied with range, but less so with service
                          • Figure 13: Key drivers of overall satisfaction with DIY retailers, March 2018
                        • 43% of shoppers visited a store to view/try products
                          • Figure 14: How they shopped for DIY/home improvement products in the last 12 months, March 2018
                        • What we think
                        • Issues and Insights

                          • Where next for Bunnings and Homebase?
                            • The facts
                              • The implications
                                • Specialists battling an increasingly fragmented market
                                  • The facts
                                    • The implications
                                      • Is there a future for the big-box store?
                                        • The facts
                                          • The implications
                                          • The Market – What You Need to Know

                                            • Housing transactions fell in 2017
                                              • Specialists’ sales fall 1.9%
                                                • Declining sales through the big-box retailers accelerates
                                                  • Consumer spending on DIY categories increases
                                                    • DIY specialists account for two thirds of spending
                                                      • Online sales hit £1.6 billion in 2017
                                                      • Market Drivers

                                                        • Housing market slows in 2017…
                                                          • Figure 15: Number of residential housing transactions completed in the UK valued at £40,000 or above, 2006-17
                                                        • …and the slowdown continues into 2018
                                                          • Figure 16: Residential housing transactions completed in the UK valued at £40,000 or above, annual percentage change in seasonally adjusted figures, April 2017-March 2018
                                                        • Consumers feel the squeeze during 2017
                                                          • Figure 17: Consumer confidence tracker, January 2015-February 2018
                                                        • Earnings growth exceeds inflation once again
                                                          • Figure 18: Average weekly earnings versus inflation, March 2014-March 2018
                                                        • Steady rise in private rented households
                                                          • Figure 19: Housing tenure, 2008/09-2016/17
                                                        • Plans to spend on the home increase, but activity remains the same
                                                          • Figure 20: Consumers that have spent money on their home (eg decorating) in the last three months, and/or plan to do so in the next three months, January 2016-February 2018
                                                      • Specialists’ Sector Size and Forecast

                                                        • Specialists’ sales fall 1.9%
                                                          • Repositioning of Homebase shifts sales to non-specialists
                                                            • Figure 21: Total DIY/hardware specialist sector size (including VAT), 2012-22
                                                            • Figure 22: Total DIY/hardware specialist sector size (including VAT), at current and constant prices, 2012-22
                                                          • Forecast methodology
                                                          • Market Segmentation

                                                            • Sheds/big box decline accelerates
                                                              • Temporary recovery forecast for 2019
                                                                • Figure 23: Shed/big-box specialists’ sector size (including VAT), 2012-22
                                                                • Figure 24: Shed/big-box specialists’ sector size (including VAT), at current and constant prices, 2012-22
                                                              • Other DIY/hardware specialists continue to outperform the sheds
                                                                • Figure 25: Other DIY/hardware stores segment (including VAT), 2012-22
                                                                • Figure 26: Other DIY/hardware stores segment (including VAT), 2012-22
                                                            • Consumer Spending on DIY Products

                                                              • Consumer spending jumps 12% in 2017
                                                                  • Figure 27: Consumer spending on DIY products, 2012-17
                                                                • Consumer spending by product category
                                                                    • Figure 28: Consumer spending on DIY products, category breakdown, 2015-17
                                                                  • Mintel’s consumer spending market size
                                                                  • Channels of Distribution

                                                                        • Figure 29: DIY products*, estimated channels of distribution, 2017
                                                                    • Online

                                                                        • Figure 30: Estimated online DIY market size (ex-VAT), 2013-17
                                                                        • Figure 31: Estimated online DIY market size (ex-VAT), 2013-17
                                                                      • Non-specialists dominate the online sector
                                                                        • Figure 32: Estimated share of DIY sales, by specialists and non-specialist DIY retailers, 2015-17
                                                                        • Figure 33: Estimated share of DIY sales online, by operation 2017
                                                                        • Figure 34: Estimated share of DIY sales online, by operation, 2015-17
                                                                      • B&Q’s online sales are growing quickly
                                                                        • Figure 35: Estimated online sales by leading retailers, 2015-17
                                                                    • Key Players – What You Need to Know

                                                                      • Travis Perkins overtakes Bunnings/Homebase
                                                                        • Non-specialists continue to make up ground
                                                                          • Kingfisher accounts for just under a quarter of all spending on DIY
                                                                            • Kingfisher brands stand out from the rest
                                                                              • Advertising spend falls 4.3% in 2017
                                                                                • B&Q targets digital engagement
                                                                                  • Bunnings conversion sees a move to the heavy end
                                                                                    • Almost half of Wickes’ sales come from heavy-end or DIY categories
                                                                                    • Leading Specialist Retailers

                                                                                      • Superstore sheds remain dominant despite challenges
                                                                                        • Specialist sales dip as further consolidation bites
                                                                                            • Figure 36: Leading DIY specialists, sales, 2014/15-2017/18
                                                                                            • Figure 37: Leading DIY specialists, outlets, 2014/15-2017/18
                                                                                            • Figure 38: Leading DIY specialists, sales per outlet, 2014/15-2017/18
                                                                                        • Leading Non-specialist Retailers

                                                                                            • Argos and Sainsbury’s: the dominant DIY non-specialist
                                                                                              • Amazon the fastest growing non-specialist
                                                                                                • Discounters continue to grow their influence on the sector
                                                                                                  • Figure 39: Leading non-specialists, estimated DIY sales (excluding VAT), 2014-17
                                                                                              • Market Shares

                                                                                                  • Figure 40: Leading retailers’ estimated trade share of sales, 2015-17
                                                                                                • Kingfisher takes the lion’s share of specialist sales
                                                                                                  • Figure 41: Leading DIY retailers, estimated share of all specialists’ sales, 2017
                                                                                                  • Figure 42: Leading DIY retailers, share of all specialists’ sales, 2015-17
                                                                                                • Amazon and the discounters make gains
                                                                                                  • Figure 43: Leading retailers, estimated share of all DIY spending, 2017
                                                                                                  • Figure 44: Leading retailers, share of all DIY spending, 2015-17
                                                                                              • Brand Research

                                                                                                  • Retailer map
                                                                                                    • Figure 45: Attitudes towards and usage of selected retailers, April 2018
                                                                                                  • Key retailer metrics
                                                                                                    • Figure 46: Key metrics for selected retailers, April 2018
                                                                                                  • Retailer attitudes: B&Q leads on trust and value for money
                                                                                                    • Figure 47: Attitudes, by retailer, April 2018
                                                                                                  • Retailer personality: Wickes risks being perceived as boring
                                                                                                    • Figure 48: Retailer personality – Macro image, April 2018
                                                                                                  • Screwfix is responsive and reliable
                                                                                                    • Figure 49: Retailer personality – Micro image, April 2018
                                                                                                  • Retailer analysis
                                                                                                    • Screwfix comes highly recommended
                                                                                                      • Figure 50: User profile of Screwfix, April 2018
                                                                                                    • B&Q still the most used and most trusted brand
                                                                                                      • Figure 51: User profile of B&Q, April 2018
                                                                                                    • Bunnings Warehouse: making an impression
                                                                                                      • Figure 52: User profile of Bunnings Warehouse, April 2018
                                                                                                    • Homebase loses female shoppers
                                                                                                      • Figure 53: User profile of Homebase, April 2018
                                                                                                    • Wickes offers simple good value
                                                                                                      • Figure 54: User profile of Wickes, April 2018
                                                                                                  • Advertising and Marketing Activity

                                                                                                    • Total DIY retail advertising spend down 4.3% year-on-year in 2017
                                                                                                      • Figure 55: Recorded above-the-line, online display and direct mail total advertising expenditure by UK DIY retailers, 2014-17
                                                                                                    • B&Q is the biggest DIY retail advertising spender
                                                                                                      • Figure 56: Leading UK DIY retailers: recorded above-the-line, online display and direct mail total advertising expenditure, 2014-17
                                                                                                    • B&Q and Homebase increase their share of total sector spend in 2016
                                                                                                      • Figure 57: Big three DIY retailers’ share of recorded above-the-line, online display and direct mail total advertising expenditure, 2016 and 2017
                                                                                                    • TV attracts the lion’s share of advertising spend
                                                                                                      • Figure 58: Recorded above-the-line, online display and direct mail total advertising expenditure by UK DIY retailers, by media type, 2014-17
                                                                                                    • What we’ve seen in 2018
                                                                                                      • B&Q spring ‘price drop’ campaign
                                                                                                        • Homebase half-term refresh ideas and kitchens campaign
                                                                                                          • Wickes reintroduces its ‘Buy now, do it later’ campaign
                                                                                                          • Innovation and Launch Activity

                                                                                                            • B&Q beefing up digital engagement
                                                                                                              • Houzz launches home products marketplace in the UK
                                                                                                                • Screwfix Instagram Shopping service
                                                                                                                  • Non-specialist positioning itself as a one-stop shop for home improvement projects
                                                                                                                    • Bunnings’ new, smaller format store
                                                                                                                      • Figure 59: Bunnings, Bicester, December 2017
                                                                                                                    • A new, quick and convenient way to sell DIY tools
                                                                                                                      • Wickes opens smallest store to date
                                                                                                                      • Space Allocation Summary

                                                                                                                          • Space allocation overview
                                                                                                                            • Figure 60: DIY retailers: in-store/outdoor space allocation estimates, April 2018
                                                                                                                          • Detailed space allocation estimates
                                                                                                                            • Figure 61: DIY retailers: detailed in-store/outdoor space allocation estimates, April 2018
                                                                                                                        • Retail Product Mix

                                                                                                                            • Figure 62: Leading DIY retailers’ estimated sales as a percentage, by product, 2017
                                                                                                                            • Figure 63: Leading DIY retailers’ estimated sales as a percentage, by product, 2017
                                                                                                                            • Figure 64: Leading DIY retailers’ estimated sales, by product, 2017
                                                                                                                        • Kingfisher Group

                                                                                                                            • What we think
                                                                                                                              • Still early days
                                                                                                                                • ONE Kingfisher driven by unifying product ranges
                                                                                                                                  • Digital overhaul helps boost e-commerce
                                                                                                                                    • Operational efficiencies have their part to play too
                                                                                                                                      • Increased urbanisation presents challenges
                                                                                                                                        • A new format?
                                                                                                                                          • What next?
                                                                                                                                            • Company background
                                                                                                                                              • Company performance
                                                                                                                                                  • Figure 65: Kingfisher Group: group financial performance, 2013/14-2017/18
                                                                                                                                                  • Figure 66: Kingfisher Group: outlet data, 2013/14-2017/18
                                                                                                                                                • Retail offering
                                                                                                                                                • Bunnings (Homebase)

                                                                                                                                                    • What we think
                                                                                                                                                      • Abandoning the soft end of the DIY market
                                                                                                                                                        • Are there any signs of improvement?
                                                                                                                                                          • Stick or twist, what next?
                                                                                                                                                            • Company background
                                                                                                                                                              • Company performance
                                                                                                                                                                • Figure 67: Bunnings UK & Ireland: group financial performance, 2012/13-2016/17
                                                                                                                                                                • Figure 68: Bunnings UK & Ireland: outlet data, 2012/13-2016/17
                                                                                                                                                              • Retail offering
                                                                                                                                                              • Travis Perkins Retail

                                                                                                                                                                  • What we think
                                                                                                                                                                    • Wickes bolstering price competitiveness credentials with new loyalty scheme
                                                                                                                                                                      • Kick-starting kitchen and bathroom sales following slump in second half of 2017
                                                                                                                                                                        • Extended fulfilment options helping drive Toolstation sales growth
                                                                                                                                                                          • Enhanced digital customer experience
                                                                                                                                                                            • Toolstation to double number of branches in the Netherlands in 2018
                                                                                                                                                                              • Company background
                                                                                                                                                                                • Company performance
                                                                                                                                                                                  • Figure 69: Travis Perkins Retail: group financial performance, 2013-17
                                                                                                                                                                                  • Figure 70: Travis Perkins Retail: outlet data, 2013-17
                                                                                                                                                                                • Retail offering
                                                                                                                                                                                • The Consumer – What You Need to Know

                                                                                                                                                                                  • 74% undertook a home improvement project in the past year
                                                                                                                                                                                    • Women improve while men maintain
                                                                                                                                                                                      • A quarter are already planning their next DIY project
                                                                                                                                                                                        • Half have shopped at B&Q in the past year
                                                                                                                                                                                          • Satisfied with range, but less so with service
                                                                                                                                                                                            • 43% of shoppers visited a store to view/try products
                                                                                                                                                                                            • Home Improvement Projects Undertaken

                                                                                                                                                                                              • 74% of households have done home improvement in the past year
                                                                                                                                                                                                • Figure 71: Project undertaken in the last 12 months, March 2018
                                                                                                                                                                                              • Scots are most likely to undertake a project
                                                                                                                                                                                                • Figure 72: Any DIY/home improvement project undertaken in the past 12 months, by region, March 2018
                                                                                                                                                                                              • Who did the work?
                                                                                                                                                                                                • 54% of women undertook work themselves
                                                                                                                                                                                                  • Figure 73: Who carried out home improvement projects undertaken in the last 12 months, March 2018
                                                                                                                                                                                                • Those living in Yorkshire and Humberside are most likely to do DIY
                                                                                                                                                                                                  • Figure 74: Home improvement projects carried out by someone in the household or a friend, March 2018
                                                                                                                                                                                              • Reasons for Undertaking Projects

                                                                                                                                                                                                • Improve the look or general maintenance
                                                                                                                                                                                                  • Figure 75: Reasons for undertaking DIY/home improvement projects in the past year, March 2018
                                                                                                                                                                                                • Women are more proactive when it comes to DIY projects
                                                                                                                                                                                                  • Figure 76: Reasons for carrying out home improvement projects, by gender, March 2018
                                                                                                                                                                                                • Londoners are more reactive when it comes to home improvement
                                                                                                                                                                                                  • Figure 77: Reasons for carrying out a home improvement project, those living in London compared to the average, March 2018
                                                                                                                                                                                              • Plans for Next Year

                                                                                                                                                                                                • 60% expect to do DIY/home improvement
                                                                                                                                                                                                    • Figure 78: DIY/home improvement plans for the next 12 months, March 2018
                                                                                                                                                                                                  • Women are more likely to be planning DIY projects
                                                                                                                                                                                                    • Figure 79: DIY/home improvement plans for the next 12 months, by age and gender, March 2018
                                                                                                                                                                                                  • Scots are most likely to have DIY plans
                                                                                                                                                                                                    • Figure 80: DIY/home improvement plans for the next 12 months, by region, March 2018
                                                                                                                                                                                                • Where They Shopped

                                                                                                                                                                                                  • Half have shopped from B&Q in the past year
                                                                                                                                                                                                    • Homebase still second in terms of popularity
                                                                                                                                                                                                      • Amazon the second-most popular online
                                                                                                                                                                                                        • Bunnings edges into the rankings
                                                                                                                                                                                                          • Figure 81: Where they shopped for DIY products in the past year, in-store or online, March 2018
                                                                                                                                                                                                        • Online shoppers are younger and wealthier than in-store shoppers
                                                                                                                                                                                                            • Figure 82: Where they shopped for DIY products in the past 12 months, by age and socio-economic group, March 2018
                                                                                                                                                                                                          • Multi-channel shopping is growing in importance
                                                                                                                                                                                                            • Figure 83: How they shopped for DIY products in the past 12 months, March 2016-March 2018
                                                                                                                                                                                                        • Satisfaction with DIY Retailers

                                                                                                                                                                                                          • DIY shoppers are satisfied with products…
                                                                                                                                                                                                            • ...but less so with service
                                                                                                                                                                                                                • Figure 84: Satisfaction with features of DIY retailers, March 2018
                                                                                                                                                                                                              • Wilko and Amazon customers are most satisfied with price
                                                                                                                                                                                                                • B&Q customers are most satisfied with the range on offer
                                                                                                                                                                                                                  • Homebase falling behind when it comes to stock availability
                                                                                                                                                                                                                    • Amazon wins for speed of checkout
                                                                                                                                                                                                                      • Figure 85: Satisfaction with specific factors at the retailer they spent the most at in the past year, by where they spent the most in the past year, March 2018
                                                                                                                                                                                                                    • Amazon shoppers are most satisfied
                                                                                                                                                                                                                      • But it’s a different story for Homebase/Bunnings
                                                                                                                                                                                                                        • Figure 86: Proportion of those who spent the most with each retailer in the past year saying they were ‘very satisfied’ with the overall experience, March 2018
                                                                                                                                                                                                                    • Key Driver Analysis

                                                                                                                                                                                                                      • Product range needs to be promoted
                                                                                                                                                                                                                        • Figure 87: Key drivers of overall satisfaction with DIY retailers, March 2018
                                                                                                                                                                                                                        • Figure 88: Overall satisfaction with DIY retailers – Key driver output, March 2018
                                                                                                                                                                                                                    • How They Shop

                                                                                                                                                                                                                      • Multichannel shopping is becoming the norm
                                                                                                                                                                                                                        • Online is the preferred source of advice and inspiration
                                                                                                                                                                                                                          • Figure 89: How they shopped for DIY/home improvement products in the last 12 months, March 2018
                                                                                                                                                                                                                        • Stores are struggling to appeal to younger shoppers
                                                                                                                                                                                                                          • Figure 90: How they shopped for DIY/home improvement products in the last 12 months, March 2018
                                                                                                                                                                                                                      • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                                                          • Abbreviations
                                                                                                                                                                                                                            • Consumer research methodology
                                                                                                                                                                                                                            • Appendix – Market Size and Forecast

                                                                                                                                                                                                                              • Forecast methodology
                                                                                                                                                                                                                              • Appendix – Key Driver Analysis

                                                                                                                                                                                                                                • Methodology
                                                                                                                                                                                                                                  • Interpretation of results
                                                                                                                                                                                                                                    • Figure 91: Overall satisfaction with DIY retailers – Key driver output, March 2018
                                                                                                                                                                                                                                    • Figure 92: Satisfaction with DIY retailers, March 2018

                                                                                                                                                                                                                                DIY Retailing - UK - May 2018

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