The true extent of the slowdown in building activity was revealed when it was reported that new home registrations were down 42% in Q2 compared to the same period last year – perhaps not too surprising with interest rates hitting a 15 year high.
The Government has announced a renewed focus on unblocking the planning system in a bid to meet its manifesto commitment to build one million homes over this Parliament, but I struggle to see that there will be an improvement in the number of completions until there’s a significant fall in inflation and mortgage rates are eased.
On a more positive note, a shortage of quality housing in the UK means the long-term outlook for the adhesives and sealants sector remains positive.
Focusing on the here and now, with the volume of construction activity in decline, it’s never been more important for merchants to stand out from the crowd. A recent report from buying group NBG found that, since the pandemic, 92% of trade sales are taking place through physical channels.
When tradespeople were asked why they chose to buy in-store, access to product knowledge and advice scored highly, along with good customer service. It’s therefore imperative that merchants work closely with suppliers to ensure their ranges are well merchandised and easy to shop to ensure the in-store experience is as good as it can be for the end user.
At Bostik, we’ve recently been working with independent merchants to introduce a shop-in-shop offering, which includes branded POS that provides clearly positioned, simplified ranges to ease product selection, with TV screens showing the key products in action. Initiatives such as these will help to ensure that merchant branches remain the preferred point of purchase for tradespeople in the short term at least.
However, while digital penetration in the merchant sector appears low in terms of sales, tradespeople are using digital channels to conduct activities that can be complementary to the trade counter. Having a good online offering that allows tradespeople to research products, pricing, and availability before travelling to store is a sure way to success.