NuGen Properties

Inflation masks merchants’ modest sales growth

Inflation masks merchants’ modest sales growth


The latest Builders Merchant Building Index (BMBI) report shows that value sales in January 2022 were 24.1% up January 2021 and 15.1% up on pre-pandemic January 2019, with two fewer trading days this year.

However, stripping away the impact of inflation, pushing the price of products up in the past couple of years, reveals a rathermore modest growth in products and materials passing out of the doors.

The rise in turnover in the past 12 months has been primarily driven by price inflation (+15.1%) rather than volume growth (+7.8%).  Growth since January 2019 is all down to inflation. Prices increased by 19.8%. The actual amount of product sold was down by 3.9%.

Product groups growing the strongest in January 2022 compared to a year before were Renewables & Water Saving (+35.8%), Timber & Joinery Products (+31.5%), Landscaping (+28.9%) and Kitchens & Bathrooms (+28.8%).

Month-on-month total merchant sales were 28.7% up in January 2022 compared to December 2021, helped by three more trading days in January. In the main product categories, Timber & Joinery Products (+32.7%) did best, followed by Ironmongery (+30.7%), Tools (+30.6%) and Heavy Building Materials (+30.1%). Like-for-like sales were up by 9.4%.

Mike Rigby, chief executive of MRA Research, which produces the monthly BMBI report for the Builders Merchant Federation, said: “2022 is off to a flying start, with solid performances recorded across almost every category. However, we are seeing more evidence to support the industry belief that the sales boom we saw in 2020 and 2021 is slowing down, as volume sales give way to price inflation.

“What impact these higher prices will have on builders’ merchant sales this year remains to be seen, but with households now facing the highest levels of inflation for 30 years, it may be the end of the repair, maintenance & improvement (RMI) boom which gave the industry such a lift during Covid.”

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Dan Morten 18/01/22

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Easy to work with, Jordan and the team were professional and were easy to communicate with.
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NuGen Properties built an extension to the rear of my property, replacing the old conservatory. I am so pleased I chose this company. From the initial quotation, through the build and after they were professional, polite & well mannered. They kept the site tidy throughout the build and kept me informed of each stage as it happened. The work was finished to a good standard and I have had nothing but compliments on their work. I am already planning for them to come back and do some more work for me in a few months. I would 100% recommend them.

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