Produced for PBM by MRA Research, the latest installment of The Pulse – a monthly tracking survey of merchants’ confidence and prospects – reveals that merchants are continuing to experience booming sales but supply shortages are a growing concern.
Telephone interviewing for this report took place between 1st and 4th June 2021.
Merchants’ confidence in the market and in their business, and sales expectations are all at exceptional levels. However, 42% of merchants were hit by supply problems in June, of which 15% of them badly or very badly affected – Chart 1.
Almost seven out of 10 merchants (69%) say all or most of their suppliers are currently able to supply them, but merchants are experiencing more widespread supply problems. National merchants are more affected, with only 57% saying all or most of their suppliers are currently able to supply them.
Lead times and price increases are particular concerns. Merchants comment on lead times of up to three months, and with products on reduced allocation.
Sales expectations increased in June compared to May, with a net +46% of merchants forecasting improved sales – Chart 2. Merchants in Scotland (+63%) and in the North (+59%) have the strongest expectations. Of those merchants predicting sales growth in June, 43% expected an increase of 10-20% compared to May.
The percentage of merchants expecting sales growth year-on-year eased for the first time since January. However, the outlook remained extremely strong with net +76% of merchants forecasting improved sales in June compared to the same month last year – also Chart 2 above.
Merchants in the Midlands (+83%) and North (+82%) had the strongest expectations. More National and Regional merchants (+89% and +72% respectively), expected higher sales than Independent outlets (+63%).
Approximately four out of 10 merchants expecting to sell more, anticipated growth of over 20%. A further third anticipated growth of 10-20%. See Chart 3 below.
Looking ahead to the next three months (June-August), quarter-on-quarter sales expectations eased marginally compared to the previous month’s survey but remain strong. Overall, a net +44% of merchants predict better sales over the period. More Nationals (+54%) anticipate higher sales than Regional outlets (+36%).
Expectations for the next six months (June-November) are also holding well, with a net +40% of merchants forecasting better sales compared to the previous six months (December 20 to May 21) – Chart 4 below. Those in the North and Midlands are most confident (+50%). Nationals (+54%) are more positive than Regional merchants (+26%).
Of those forecasting improved sales over the next six months, 40% predict growth of up to 10%. A further 40% expect growth of 10-20%. Chart 5.
Confidence in the market
Compared with strong confidence levels in March, April and May, confidence in the market declined in June compared with the previous month, and for the first time since January 2021. A net -13% of merchants were less confident month-on-month. Merchants in the North (+32%) were the only ones more confident compared to May.
Year-on-year, confidence in the market dropped sharply compared to the previous month’s survey, but merchants remain positive (net +30%) – Chart 6. Merchants in the North were most confident (+64%).
Confidence in their business
Merchants’ confidence in the prospects for their own business dropped in June compared to May but remained upbeat (net +27%). Nationals (+41%) were more confident than Regionals (+15%).
Year-on-year, a net +67% of merchants were more confident in June compared to June 2020, although confidence eased slightly compared to the previous month’s survey – also Chart 6 above.
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 26 th in the series, with interviews conducted by MRA Research between 1st and 4th June 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.
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.
Download the full report at www.mra-research.co.uk/the-pulse