As revealed in the September edition of PBM, the latest instalment of The Pulse reveals that merchants’ confidence in the prospects for the market declined to a new low for 2022 of a net -46% year on year.
Merchants remained more positive in the prospects for their own business but continued to battle several challenges in a uniquely difficult trading period. And here, supplier price rises and product availability were the greatest problems.
Produced by MRA Research, The Pulse is a monthly tracking survey of merchants’ confidence and prospects. Telephone interviewing took place between 1st and 5th July 2022 (3 working days).
Problems faced by merchants
Merchants continued to face multiple problems in a difficult trading environment — Chart1. Nearly half (49%) of all merchants said supplier price rises were their single biggest problem. Product availability, squeezed margins and lead times were the single biggest problems for 43% of merchants, and problems for over 7 in 10 merchants.
Sales expectations
Merchants’ sales expectations for July compared with June were unchanged at a buoyant net +18% — Chart 2. National (+35%) and Regional merchants (+25%) had relatively high sales expectations, however expectations were weak among Independents (-47%).
Year-on-year sales expectations continued to weaken from a net +64% year-on-year in January to a net +2% in June, indicating mild growth. Merchants in the Midlands (+17%), Mid-sized outlets (+17%) and the Nationals (+22%) have reasonably strong expectations. The North (-27%), Large outlets (-17%) and Independents (-33%) expect sales to decline.
Looking six months ahead, a net -10% of merchants expected sales to decline in the six months July-December, compared to the previous six months — Chart 3.
Nationals (+30%) and merchants in Scotland (+13%) still expected sales to grow. Small branches had higher expectations (+12%) than Mid-sized outlets (-5%) and Large branches (-72%) who expected sales to contract. Independents (-73%) had the lowest expectations.
Just under half the merchants expecting sales to contract in the next six months, expected sales to decrease by up to 9% — Chart 4. About half (49%) expected a decrease of up to 20%.
Confidence in the market
Year-on-year, market confidence continued to slide with a net -46% of merchants less confident in the market in July than they were in July 2021 — Chart 5. Confidence dropped across all sizes of outlet, regions and types of merchant. Large outlets (-61%), the North (-68%) and Independents (-67%) were the least confident.
Month-on-month a net -31% of merchants were less confident in the market in July than in the previous month. Market confidence was marginally less weak than in June (-35%).
All sizes of outlet & all regions reported a drop in confidence, with Large outlets (-50%) and merchants in the North the least confident (-50%).
Nationals had a balanced view of the prospects for the market (a net 0%). Independents and Regionals (-47% and -50% respectively) were the least confident in the market.
Confidence in their business
Merchants’ confidence in their own business continued to decline Year-on-Year to a just positive net +1% – Chart 5. Mid-sized outlets (+5%) were more confident than Large outlets (-11%). Merchants in the Midlands (+38%) were most confident. The North were least confident (-14%).
The contrast between Nationals and Independents was stark, with Nationals more confident (+19%) and Independents not (-40%).
Merchants’ confidence in their own business dropped to a still positive net +11%, month on month. Confidence was strong among Small branches (+17%) and Mid-sized outlets size of branch (+30%), particularly in the North (+43%).
Scotland (0%) and Independents (-5%) had less confidence in the prospects for their own business.
The full report can be downloaded for free from www.mra-research.co.uk/the-pulse or call Ralph Sutcliffe at MRA Research on 01453 521621.
About the Pulse
The Pulse is a monthly trends survey tracking builders’ merchants’ confidence and prospects over time. Produced by MRA Research, the insight division of MRA Marketing, it captures merchants’ views of future prospects in terms of sales expectations, confidence in their business, confidence in the market, and the key issues and problems they experience.
This report is the 39th in the series, with interviews conducted by MRA Research between 1st and 5th July 2022 (3 working days). Each month a representative sample of 100 merchants is interviewed. The sample is balanced by region, size and type of merchant, including nationals, regional multi-branch independents, and smaller independent merchants.
The difference between the percentage of merchants expecting growth and those expecting a decrease is the net figure, expressed as a percentage. A positive net percentage indicates growth, a negative indicates decline. Net zero implies no change.
