As featured in the December edition of PBM, the latest ‘The Pulse’ tracking survey shows that sales expectations and confidence among our merchant panel continue to be positive, however the underlying concerns remain.
Merchants’ sales expectations remain high, despite the continuing constraints of supply problems, long lead times and rising prices. Similarly, confidence in the market continued to improve after a late summer wobble however merchants’ confidence in the prospects for their own business is stronger than their confidence in the market.
The Pulse, by MRA Research, is a monthly tracking survey of merchants’ sales expectations and confidence. Telephone interviewing took place between 1st and 5th October 2021.
Materials supply
Merchants were asked on a scale of 1 (not at all) to 7 (very badly) to what extent their business and customers have been affected by supply problems. An average score of 4.07 in October indicates that there are few signs of supply problems easing — Chart 1.
Sales expectations
Sales expectations improved in October compared to September, with a net +23% of merchants forecasting higher sales month-on-month — Chart 2. By branch size, expectations were strongest among Small outlets (+36%). The North (+41%) and the South (+37%) had the highest expectations by region.
Of merchants expecting sales to increase in October, 40% expected growth of up to 9%. A further 56% expected an increase of 10% or more compared to September.
Merchants’ year-on-year sales expectations continued to improve in October (net +39%) — also Chart 2. Mid-sized outlets (+44%) and merchants in the North (+77%) had the strongest expectations. More National (+51%) and Regional (+47%) merchants expected growth than Independent outlets, which expected no change (+0%).
Of those expecting growth in October, 31% expected sales to be up to 9% higher than October last year. However, nearly seven in ten merchants expected sales to grow by 10% or more.
Merchants’ sales expectations for October to December compared to the previous three months are seasonally weak, with a net -10% expecting lower sales over the period. While merchants in the North (+14%) expect sales to improve, other regions anticipate a decline.
Among merchants expecting weaker sales in October to December compared to the previous quarter, 40% expect them to decrease by up to 9%. Six in ten merchants expect sales to fall by 10% or more.
Merchants’ sales expectations for the next six months (October 2021- March 2022) improved compared to the previous six months with a net +2% expecting higher sales over the period — Chart 3. By branch size, expectations are strongest among Small outlets (+21%). More merchants in the North (+18%) expect growth than in other regions.
Of those merchants expecting sales to increase in the next six months compared to the last six months, 55% expect growth of up to 9%. A further 43% of merchants expect sales to increase by 10% or more — Chart 4.
Confidence in the market
Confidence in the market strengthened slightly in October compared to September’s survey with a net +13% of merchants more confident than the previous month. Confidence is up across the board, except for merchants in the Midlands who are less confident (-29%).
Year-on-year, confidence in the market remained steady compared to September’s survey, with a net +27% of merchants more confident — Chart 5. Small outlets (+33%) and Mid-sized branches (+32%) were significantly more confident than Large outlets (+5%). Merchants in the North were most confident regionally (+41%).
Confidence in their business
Month-on-month there was no change in merchants’ confidence in the prospects for their own business compared to September’s survey (net +32%). Regional (+37%) and National merchants (+35%) were more confident than Independent merchants (+15%).
Year-on-year, merchants’ confidence in their own business improved in October with a net +52% more confident than the same month last year — also Chart 5.
Download the full report at www.mra-research.co.uk/the-pulse.
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.
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 30th in the series, with interviews conducted by MRA Research between 1st and 5th October 2021. 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.
