Talasey Group comment: Q1 2017
Malcolm Gough, Group Sales & Marketing Director Talasey Group is BMBI’s Expert for Natural Stone Landscaping Products, Vitrified Paving & Artificial Grass.
The Brexit vote has had a big effect on the natural stone hard landscaping market. The pound is buying fewer Indian Rupees; shipping costs have increased nearly fivefold, up from £400 to £1,800 a container. Combined with increases in raw material costs this is hurting suppliers, particularly smaller players. Costs of particular natural stone products such as grey and pale cream are also more volatile because of their origination.
Higher costs are being passed on – we estimate prices are 25% up on average across the market – but the level of these increases means not all of it can be passed on. This is savaging supplier margins.
Some smaller natural stone suppliers are holding back on shipping products, hoping container costs come down. This could potentially cause stock shortages. The June to July monsoon season in India will also add pressure to supply. In such times, it might be tempting to look elsewhere for your natural stone landscaping products. But it’s important to check natural stone suppliers are members of ETI (the Ethical Trade Initiative). ETI gives builders’ merchants and their customers the assurance that the natural stone they stock and sell has been manufactured in controlled working conditions that does not exploit workers. Members are listed at www.ethicaltrade.org
Despite Brexit upheaval, we estimate market volume is up by 3-4%. Higher prices mean values are up more. Price rises are also closing the gap between natural stone and other premium hard landscaping products such as Italian porcelain vitrified paving. This is opening up new opportunities to cross sell and up sell.
Artificial grass is also trending strongly, particularly demand for better quality grasses. Time-poor homeowners are looking for a viable alternative to natural grass, and are not settling for standard products. Demand is strong for bowling-green quality, for example, the super luxury artificial grass that looks like the real thing, with all year round appeal and the benefits of low maintenance.
These are challenging times for these markets, but there are also many opportunities. With summer around the corner, we’re expecting a positive Quarter 2.
