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Mon June 24 2024

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Inflation masks merchants' modest sales growth

24 Mar 22 Sales turnover through the tills of British builders’ merchants was up by nearly a quarter in January 2022 compared to the same month in 2021, making it the strongest year-on-year growth seen in recent months.

The latest Builders Merchant Building Index (BMBI) report shows that value sales in January 2022 were 24.1% up January 2021 and 15.1% up on pre-pandemic January 2019, with two fewer trading days this year.

However, stripping away the impact of inflation, pushing the price of products up in the past couple of years, reveals a rathermore modest growth in products and materials passing out of the doors.

The rise in turnover in the past 12 months has been primarily driven by price inflation (+15.1%) rather than volume growth (+7.8%).  Growth since January 2019 is all down to inflation. Prices increased by 19.8%. The actual amount of product sold was down by 3.9%.

Product groups growing the strongest in January 2022 compared to a year before were Renewables & Water Saving (+35.8%), Timber & Joinery Products (+31.5%), Landscaping (+28.9%) and Kitchens & Bathrooms (+28.8%).

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Month-on-month total merchant sales were 28.7% up in January 2022 compared to December 2021, helped by three more trading days in January. In the main product categories, Timber & Joinery Products (+32.7%) did best, followed by Ironmongery (+30.7%), Tools (+30.6%) and Heavy Building Materials (+30.1%). Like-for-like sales were up by 9.4%.

Mike Rigby, chief executive of MRA Research, which produces the monthly BMBI report for the Builders Merchant Federation, said: “2022 is off to a flying start, with solid performances recorded across almost every category. However, we are seeing more evidence to support the industry belief that the sales boom we saw in 2020 and 2021 is slowing down, as volume sales give way to price inflation.

“What impact these higher prices will have on builders’ merchant sales this year remains to be seen, but with households now facing the highest levels of inflation for 30 years, it may be the end of the repair, maintenance & improvement (RMI) boom which gave the industry such a lift during Covid.”

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