A combination of inflationary pressures has seen households warned to expect the worst hit to real incomes since comparable records began 30 years ago, with further price hikes expected when the energy cap is next revised in October 2022.

Significantly, these pressures will not affect all households equally, with lower-income consumers set to disproportionately suffer, further exacerbating the polarisation of demand seen across home retail since March 2020. This is expanded on in Analyst Insight – The impact of Inflation on Retail – February 2022.

In DIY, this fallout will be partially nullified by record housing activity, high order books and the fact that many home purchases are triggered by necessity, but it will nonetheless blunt spending. Moreover, this could then be compounded as home improvements fall further down the agenda amid the likely cutback on non-essential expenditure. Indeed, after two years of bumper spending on the home, consumers are now more likely to prioritise other previously suppressed areas, such as travel, clothing and entertainment.

So, inflationary pressures will undoubtedly limit total expenditure and change the shape of some demand, with many likely to trade down or look to other means of achieving value. However, the renewed need for value will, in turn, offer new opportunities for DIY specialists, as discussed later in this section.

In addition to inflation, there has been significant disruption to global supply chains. Although apparent since the outbreak of COVID-19 in early 2020, these problems have ramped up in the past six months with the reopening of the post-COVID-19 global economy, which has seen demand surge across the board. In the UK, this has been further complicated by obstacles around Brexit.

This disruption has seen freight costs surge, exposing home retail and DIY given the prevalence of Chinese manufacturing. This fed into the lengthening of lead times and supply shortages already reported in the past year. Since the turn of the year, this disruption has been core to price hikes within the market.

As well as exacerbating the uncertainty expected in the year ahead, these obstacles could see a shift in strategies moving forward. Indeed, a number of leading home retailers have already moved to re-shore or boost domestic manufacturing. It could also feed into nearshoring, with manufacturing brought closer to the UK in Europe in the future.

As well as causing a humanitarian disaster, both Ukraine and Russia are major producers of the raw materials and energy involved in the production, transport and manufacturing of home improvement goods. As such, disruption here will further exacerbate both inflation and supply chain problems. Within the market, rising prices, reduced product ranges and lengthening lead times could also see a reassessment of priorities, as issues such as sustainability are overridden by costs and availability.

Another means of support is expanding credit options. Although always popular in the DIY market, many of the existing propositions are tied to retailers. Specialists could broaden this by better exploiting newer payment options from the likes of PayPal and Klarna, the flexibility of which have seen them become hugely popular online and increasingly in-store. Such options could prove particularly attractive among the important younger demographic.