UK Tool Distribution market saw growth of 8% in 2014

In 2014, it is estimated that the tool distribution market grew by 8% as a result of the improving economy which led to higher levels of construction and RMI activity. The tool market is mature and has, in general, seen moderate growth rates, though 2014 has proved to be good year.

Power tools account for an estimated 50-55% share of the market and hand tools for around 45-50% share. Hand tools is a mature, steady sector with few major changes in product development and sales are largely dependent on product replacements. In contrast, demand for power tools has benefited from new products and product innovation that help to drive sales, such as lithium-ion battery and brushless motor tools. Performance in the garden tools sector is heavily influenced by the weather in any given year, with 2014 a relatively good year, though performance in 2015 has been less buoyant.

Distribution of tools used in construction, RMI and gardening is highly complex and fragmented, reflecting the number and ranges of products offered, as well as the range of different end-users and contractors. Tool distribution comprises a mix of large national players competing with many regional and local companies, in both trade and consumer channels, but several major national and international groups hold significant shares in the tools market.

Digital technology is driving a change in buying behaviour in this sector, with the internet and, in particular, the use of mobile devices among tradesmen, becoming increasingly important. Whilst the internet-only channel is currently relatively small, its influence on distribution and sales is much wider. It has changed the way in which customers interact with suppliers - for example, there has been an increase in the use of ‘click and collect’ facilities that encourages people to visit stores, and leading to an increase in sales via trade counters. Social media is also gaining in importance for both promotional messages and customer feedback, assisting in growing direct sales.

“The future of the tools distribution market mix will depend on channel response to the opportunities and threats posed by the evolving distribution landscape and how quickly they respond to them” said Andrew Hartley, Director of AMA Research. “Over the past 2-3 years there has also been some consolidation within key distribution channels and this is likely to continue for the duration of the forecast period.”

Future prospects for the overall tools market are positive, with both domestic and non-domestic construction levels forecast to increase. There will be a continued expansion of cordless product ranges and brushless motors products, with other product developments expected to stimulate market growth, including tools that are more ergonomically designed for employee welfare as well as increasing lifetime and efficiency.

The tool market is forecast to continue growing in 2015, with steady underlying growth of around 3-4% per annum forecast in the medium term, providing the construction and home improvement markets remain reasonably buoyant.

The ‘Tool Distribution Market Report – UK 2015-2019 Analysis’ report is published by AMA Research, a leading provider of market research and consultancy services within the construction and home improvement markets. The report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.