Research for the 1st edition “Shopfitting Market Trends Report 2019” from MTW Research has found that sales of building products and materials are set to grow by £160 million in 2020, despite fundamental shifts in market demand.
The 140-page report tracks shopfitting product sales, with …..
….. lighting, security, merchandising units and commercial glazing amongst the best performing sectors. Some products have grown sales by 30% in the last 6 years through shopfitters. The ceilings and partitions market is set to perform well to 2023, with electrical accessories, commercial flooring and the commercial bathroom market also growth sectors for shopfitters and manufacturers. MTW highlight slower growth for some building products due to Brexit and the General Election reducing growth by around £50 million in 2019 and 2020.
The report also identifies shares within the key end use sectors, confirming a fundamental shift in the shopfitting market in recent years. According to MTW, the retail end use sector will no longer be the largest market for shopfitters in 2020, with refurbishment demand from entertainment and leisure sectors having grown by more than £1.1 billion in the last 6 years.
Based on industry financials, the report identifies critical trends in the shopfitting market, some offering opportunities whilst others represent a threat to growth. One example is how e-commerce has increased consumer expectations of store refresh rates, prompting smaller, faster retail refurbishment projects in 2020. MTW point to the National Living Wage and construction skills shortage exerting sustained pressure on shopfitting market profitability. The NLW is set to rise by 28% by 2024, averaging 5% each year, further eroding profitability and prompting shopfitters to develop increasingly innovative differentiation, including establishing closer links with building product suppliers.
Discussing the trend of more sophisticated differentiation by shopfitters, MTW’s director, Mark Waddy, said, “Shopfitters are offering enhanced services, developing closer links with product suppliers, refocusing their sector targeting; and possess increasingly niche market knowledge in order to succeed. Strategic integration with the client’s aims and tactics at the heart of each service offering has also become critical to winning tenders whilst avoiding margin erosion.”
MTW forecast internet sales will account for 25% of the total retail market by 2023, significantly and permanently impacting on retail market dynamics, whilst other end use sectors grow rapidly. The shopfitting market is set to rise by £2.8 billion to 2023, led by foodservice, entertainment and leisure sectors. According to MTW, refurbishment and new build work in the entertainment sector now stands at £8.7 billion, up 85% since 2013. 2017 saw growth of 25% in entertainment refurbishment in 1 year, underlining the growing importance of this sector for the shopfitting market.
30% growth to 2023 for some shopfitting sectors suggest a positive outlook for the shopfitting market and associated building product suppliers. However, MTW point to an increasing number of pitfalls evident in the market heading into 2020, with contractors no longer able to rely on organic growth in traditional sectors to succeed.
The report is available to purchase from MTW Research’s website.
