Independent builders’ merchants have entered a new year facing the prospect of tighter cashflow and a sluggish housing market that is only forecast to improve the other side of the summer. Ian Murphy, Chief Operating Officer at IBC, a Partner of National Buying Group (NBG), outlines the practical shifts, including digitalisation and better data standards, that can help independents to steady margins and secure local growth.
Cashflow and an uneven housing market
Independent merchants can expect the year to be heavily influenced by the twin pressures of constrained cashflow and limited market support for new-build activity. Demand for new homes is likely to be subdued for the first six months of 2026, so merchants will need to manage working capital carefully, be disciplined about purchasing and avoid overstocking slow-moving items.
Inventory decisions that ignore both cost and availability risk tying up cash or forcing markdowns when the market picks up.
Digitalisation is about more than efficiency
Digital adoption is no longer optional for independents. With shifts to both the demographic of the workforce and buying behaviours, an effective digital footprint opens doors to new customer segments and streamlines day-to-day operations.
It’s important that merchants prioritise simple, high-impact moves: ensure Supplier pricing is tracked accurately and that any online listings are accurate enough to make it easy for local trades to check stock and prices remotely, and consider light Customer Relationship Management (CRM) tools to capture repeat-business opportunities.
These steps both improve service for existing customers and make it easier to win new ones.
“Despite the push to digital, the most reliable growth opportunity for independents next year will be local strength: exceptional customer service, trusted product advice and agility at branch level.”
Better product data is a sector-wide advance with local benefits
The industry is moving towards shared product data standards with the NBG-backed Building Materials Digital Services (BMDS) Data Yard initiative, and merchants stand to gain from clearer, more consistent information. A new, centralised product data pool will accept records in a single standard format, while existing product information systems are already able to ingest and distribute that same structured data.
For independents, standardised product information reduces errors in specification, cuts time spent chasing details with Suppliers and supports smarter ordering decisions — all of which lower the operational friction that eats into margins.
Local service and knowledge are key
Despite the push to digital, the most reliable growth opportunity for independents next year will be local strength: exceptional customer service, trusted product advice and agility at branch level.
Merchants who double down on local relationships — understanding builders’ project pipelines, offering timely technical support and tailoring stock to regional demand — will retain existing customers and attract new trade buyers. Simple service differentiators, such as proactive stock alerts or in-branch product demonstrations, can make the difference when wider market demand is muted.
Industry collaboration and support
Greater collaboration within the merchant and Supplier community is improving access to pricing and promotional resources. Strategic alliances between buying groups mean independents can benefit from improved purchasing terms while retaining local autonomy.
Complementing this, IBC is launching Supplier marketing programmes that help members amplify their online presence and support local websites and social channels. The effect is twofold: better behind-the-scenes purchasing power and more visible, localised marketing support for independents.
Straightforward steps to take now for a strong 2026:
Tighten working capital routines including reviewing payment terms, rotating stock more frequently and focussing on products that sell well.
Improve basic digital touchpoints such as online availability and up-to-date pricing, and make it simple for customers to contact branches.
Adopt standardised data to simplify purchasing and reduce specification errors.
Lean into local expertise by investing in staff product training. Use customer conversations to shape next season’s buying.
Monitor the market and plan for a slow start to the year while ensuring flexibility in purchasing to capitalise on any uplift in the second half.
A pragmatic outlook
If 2025 underlined one lesson, it was that merchants closest to their customers are best placed to grow with them. This year will reward independents who combine disciplined cashflow management and sensible stock control with pragmatic digital steps and continued investment in local service.
The enhanced buying power and network support of NBG is also a huge advantage to independent merchants who are part of the group. It allows them to compete on price against national chains and learn quickly from other merchants who are facing similar challenges.
Together, the advantages of NBG combined with digitalisation, stock controls and staying close to customers should help merchants protect margins now and be ready to benefit as the market improves later in 2026.
For more information on the NBG, visit NationalBuyingGroup.com.
