Against the usual seasonal fluctuations and ongoing issues with supply and material prices, merchants’ sales expectations and confidence remain strong. Indeed, expectations are particularly bullish for the next six months (Nov-21 to Apr-22) as merchants see supply issues stabilising and see strong demand continuing into next year.
The Pulse, by MRA Research, is a monthly tracking survey of merchants’ confidence and prospects. Telephone interviewing took place between 1st and 4th November 2021.
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 4.08 in November indicates that supply issues have moderated slightly over the last three months — Chart 1. However, merchants continue to have significant supply problems.
Sales expectations weakened in November compared to October, with only a net +1% of merchants expecting higher sales month-on-month — Chart 2. Expectations varied by branch size and region. Among merchants expecting sales to increase in November, over half expected growth of up to 9%. Forty-three percent of merchants expected sales to grow by more than 10%.
Merchants’ year-on-year sales expectations eased slightly in November but stay strong (net +29%) — also Chart 2. Merchants of all sizes, type and across all regions expected sales in November 2021 to be above November 2020.
Among those expecting growth in November 2021 compared to the same month the previous year, 37% expected growth of up to 9%. A further 43% expected sales to improve 10-20%.
In line with seasonal expectations, a net -36% of merchants expect lower sales in the next three months (Nov 2021-Jan 2022) compared to the previous three months (Aug-Oct 2021). Expectations are lowest among Large outlets (-56%), merchants in Scotland (-63%) and Independents (-45%).
Among merchants expecting weaker sales over the next quarter, 50% expect sales to drop by up to 9%. Forty-seven percent expect sales to drop by more than 10%.
However, a net balance of 12% of merchants expect their sales to grow in the next six months (Nov 2021 to Apr 2022) compared to the previous six months — Chart 3. More merchants in the North (+32%) and Regional outlets (+24%) expect sales to increase over the next six months. Scotland is the only region where a net balance of merchants expect sales to drop over the period (-13%).
Of those merchants expecting sales to increase in the next six months compared to the last six months, 44% expect sales to increase up to 9%. Over half of the merchants expect sales to grow by 10% or more — Chart 4.
Confidence in the market
Month-on-month, confidence in the market weakened slightly in November compared to October’s survey, with a net +7% of merchants more confident than the previous month. Confidence was strongest among Mid-sized outlets (+22%), merchants in Scotland (+25%) and the Nationals (+35%).
Year-on-year, confidence in the market improved slightly with a net +34% of merchants more confident in November 2021 than the same month in 2020 — Chart 5. Confidence was particularly widespread among merchants in the North (+59%) and Nationals (+51%).
Confidence in their business
Merchants’ month-on-month confidence in their own business was at a high level in November 2021 (net +30%) for the third consecutive month. Confidence levels were similar across branch sizes and most regions. Nationals (+54%) and Regionals (+24%) were significantly more confident in November than Independents (+7%).
Compared to November 2020, merchants’ confidence in their own business improved slightly again in November 2021 (net +55%) — Chart 5. Small outlets (+61%) and Nationals (+65%) were most confident.
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 31st in the series, with interviews conducted by MRA Research between 1st and 4th November 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.
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.