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Andrew Ross, DIY in Europe UK
There are reasons for cautious optimism about the future course of the DIY market in the United Kingdom. It has undoubtedly been a difficult year for retailers. Everyone in the trade is concerned about the batch of bad profit and sales figures from leading DIY operators. Nonetheless, key underlying economic indicators, the level of home ownership, the condition of the housing stock and rising house prices – even though the increase is slower than previously – all point to a strong market in the future for DIY and household products.
However, thought is now being given to what exactly has fuelled the growth in DIY sales in the past. It has recently been revealed that, compared with his European counterpart, the average Briton has twice the level of unsecured debt (not to mention mortgage commitments secured on property). Total unsecured debt in the United Kingdom amounts to some € 319 bn – or one-third of all unsecured debt in the European Union.
It's a fair bet that a significant proportion of that debt is accounted for by the purchase of products for the home or the carrying out of DIY projects. If our debts have reached saturation point, will we have to rein in our spending habits? Furthermore, what if something happens to the underlying strength of the economy and to the employment levels, which have so far supported this mountain of consumer debt? Will the whole house of cards come tumbling down?
“The UK is an increasingly difficult place to do business, due to the highly indebted nature of the population,” observes the financial services analyst at Datamonitor, who produced a recent report on the subject. One result is that lenders will increasingly turn their attention to consumers in Europe. In Germany, for instance, where consumer debt is only around € 60 bn, and use of credit tends to be restricted to car purchases. If Germans can be persuaded to carry out home improvements on credit, like the British and French (who are second in the debt league at € 143 bn), that could provide a big short-term boost to the German market. But they would just have to hope that they can manage their debts better than we seem to have done in the United Kingdom.
There are reasons for cautious optimism about the future course of the DIY market in the United Kingdom. It has undoubtedly been a difficult year for retailers. Everyone in the trade is concerned about the batch of bad profit and sales figures from leading DIY operators. Nonetheless, key underlying economic indicators, the level of home ownership, the condition of the housing stock and rising house prices – even though the increase is slower than previously – all point to a strong market in the future for DIY and household products.
However, thought is now being given to what exactly has fuelled the growth in DIY sales in the past. It has recently been revealed that, compared with his European counterpart, the average Briton has twice the level of unsecured debt (not to mention mortgage commitments secured on property). Total unsecured debt in the United Kingdom amounts to some € 319 bn – or one-third of all unsecured debt in the European Union.
It's a fair bet that a significant proportion of that debt is accounted for by the purchase of products for the home or the carrying out of DIY projects. If our debts have reached saturation point, will we have to rein in our spending habits? Furthermore, what if something happens to the underlying strength of the economy and to the employment levels, which have so far supported this mountain of consumer debt? Will the whole house of cards come tumbling down?
“The UK is an increasingly difficult place to do business, due to the highly indebted nature of the population,” observes the financial services analyst at Datamonitor, who produced a recent report on the subject. One result is that lenders will increasingly turn their attention to consumers in Europe. In Germany, for instance, where consumer debt is only around € 60 bn, and use of credit tends to be restricted to car purchases. If Germans can be persuaded to carry out home improvements on credit, like the British and French (who are second in the debt league at € 143 bn), that could provide a big short-term boost to the German market. But they would just have to hope that they can manage their debts better than we seem to have done in the United Kingdom.
