Approximately 90% of the UK market for ceramic tiles is accounted for by imports, with only one remaining volume manufacturer. Moreover, 67% of imports are derived from the EU, principally Spain and Italy, making Brexit a critical issue to the sector after 2020. Substitute products such as splashbacks are gaining traction in the wall tile sector, while a range of substitute products are affecting flooring applications. For this reason, any imposition of tariffs could have a major impact on demand.

COVID-19 has majorly impacted what was a mature market in 2020. Imports fell by 10% in Q1 2020 and by a much stronger 52% in Q2, resulting in a first half decline in imports of 31%. The severe disruption in the current year is affecting both the critical markets of residential accommodation and commercial properties.

In the commercial sector, COVID-19 is expected to have some long-term demand implications, with office demand falling due to greater levels of remote working, while demand from the beleaguered retail sector has also been affected, causing further retail casualties. In the longer term, the opportunity to re-purpose such buildings to residential accommodation might go some way to solving the housing shortage, which has long been a feature of the UK.

• The impact of COVID-19 on the development of the ceramic tiles market

• How the mature market has been impacted but why long-term growth can be expected

• How and why the UK tile industry is confined

• How highly-important imports are heavily reliant on EU sources, a major concern with Brexit trade negotiations yet to be resolved

• How demand breaks down between diverse market sectors, and the varied influences on those demand sectors

• The profile of the distribution sector and how e-commerce is seen to be complementary to bricks and mortar outlets

The first COVID-19 cases were confirmed in the UK at the end of January, with a small number of cases in February. The government focused on the ‘contain’ stage of its strategy, with the country continuing to operate much as normal. As the case level rose, the government ordered the closure of non-essential retail stores on 20^th March.

A wider lockdown requiring people to stay at home except for essential shopping, exercise and work ‘if absolutely necessary’ followed on 23^rd March. Initially, a three-week timeframe was put on the measures, which was extended in mid-April for another three weeks. On 10^th May a conditional plan to reopen society was announced, including those who cannot work from home, such as those in construction and manufacturing, being encouraged to return to work from the 11^th May. This was subsequently clarified that companies will have to prove they have introduced safety measures before they can reopen.

The Health Protections Regulations 2020 came into effect on 15^th June, allowing the reopening of all non-essential retail stores in England, as well as the mandatory use of face coverings on public transport. Pubs, restaurants, hotels and hairdressers were able to reopen on 4^th July, with many beauty businesses following on 13^th July.

To avoid a return to national lockdowns, the government reacted by introducing local restrictions in areas where COVID-19 cases are rising strongly in excess of national averages. Such local measures have to date affected Leicester (from 29th June with easing as of 3^rd August); parts of North England (Greater Manchester, parts of Lancashire and West Yorkshire from 31 July) and Luton (with easing as of 1^st August).

On 31^st July, some national lockdown-easing measures scheduled to begin on 1^st August were postponed for two weeks amid concerns of rising COVID-19 cases, with bowling alleys and casinos remaining closed.

Mintel’s economic assumptions are based on the Office for Budget Responsibility’s central scenario included in its July 2020 Fiscal Sustainability Report. The scenario suggests that UK GDP could fall by 12.4% in 2020, recovering by 8.7% in 2021, and that unemployment will reach 11.9% by the end of 2020, falling to 8.8% by the end of 2021.

The current uncertainty, however, means there is wide variation on the range of forecasts, which is reflected in the OBR’s own scenarios. In its upside scenario, economic activity returns to pre-COVID-19 levels by Q1 2021. Its more negative scenario, by contrast, would mean that GDP doesn’t recover until Q3 2024.

For the purposes of this Report, Mintel has used the following definitions:

The ceramic tile industry makes a wide range of products for covering floors and walls, with applications in private, public and industrial buildings. Tiles can be produced in a variety of shapes and sizes, and can incorporate different patterns.

The ceramic tile market is commonly segmented into:

• glazed tiles

• unglazed tiles

Glazed tiles represent the largest element of sales. The production process is similar to unglazed tiles with further processing undertaken. Unglazed tiles are either pressed or extruded from clays in a plastic state, and then fired at high temperatures, which increases the durability of the tile. Many tiles are vitrified since they are often used in heavy-wear applications.

Unglazed tiles have both commercial and residential uses and applications, including:

• facing of walls

• hearth places and mantelpieces

• floor coverings

• paths

Glazed tiles are further covered with a vitreous glaze, which can be applied by:

• single firing

• double firing

Single firing was pioneered in 1974 by Marazzi of Italy. The process now accounts for 65% of global glazed tile production.

Applications for glazed tiles cover both commercial and residential applications. Major commercial uses include:

• hotels

• hospitals

• sports and leisure centres

• swimming pools

• shopping centres and retail floors, especially food

• catering establishment kitchens

• underground and mainline stations

Primary residential applications include:

• kitchen or bathroom wall tiles

• kitchen or bathroom floor tiles

• conservatory floor tiles

Further market segmentation concerns the distribution and application of tiles. Contractors dominate commercial applications and the residential market, and are especially important in the new build sector of the residential market. Tiling is also seen to be the province of the general builder, but only a very small share of tiles are actually distributed through builders' merchants. However, alongside contractors and builders, a wide range of individuals purchase tiles from DIY stores or retail tile specialists, and then install the tiles themselves.