This report looks at the retailing of DIY and associated home-improvement products in the UK.

The sector experienced tough trading conditions in a downturn that started well before the onset of recession, as interest in home makeovers dwindled. The recession-driven fall in discretionary spending and the plunge in residential property transactions compounded this. Between 2008 and 2012, the DIY specialists sector lost 11%, or £1.3 billion, in annual sales.

But 2013 saw the start of strong growth in the number of housing transactions and an associated boom in house prices (in some regions), and this prompted an upturn in demand for DIY. Given the macroeconomic context, we expect this resurgence in DIY sales to continue through 2014 and likely into 2015.

This year, we asked consumers:

• Which retailers they had bought DIY products from in the past 12 months, and whether this was online or in-store;

• What types of DIY/home improvement products they had bought in the past 12 months;

• What types of DIY/home improvement they plan to do in the year ahead, and whether they will do this themselves or pay a someone to do for them;

• Whether they prefer buying DIY products from a specialist or non-specialist retailer, and why;

• Other attitudes towards, and participation in, DIY.

As with our 2013 report, we include improved report sections with more data, including:

• Our Sector Size and Forecast section this year includes segment sizes and forecasts for the Big-Box/’Shed’ segment (comprising the major large-store DIY retailers) and all other DIY/hardware specialists, as well as for the DIY specialists sector in total.

• The Leading Specialists: Financials and Outlets section brings together in one section five years of operational indicators – such as revenues, store numbers, sales per outlet, and operating margins – for the leading DIY specialists.

• The Leading Non-Specialist Retailers section provides market share estimates and company profiles of major non-specialist retailers of DIY goods, such as Argos, Amazon and Wilkinsons. The non-specialists retailers are also included along with the specialists in our Market Shares section.

• Proprietary data on retailers’ distribution of sales area by product type in the Space Allocation section.

• An updated Online section, providing Mintel estimates for online sales by DIY specialists and online sales of DIY products, as well as online market shares consumer research on usage of the online channel for DIY shopping.

Core DIY – paint, wallpaper, screws, tools etc. – is now a small part of the proposition of the DIY sector. The closest any of the majors comes to such a narrow definition is Wickes. But the other two majors, B&Q and Homebase, have expanded their offer enormously. They are broad-range home-improvement stores with substantial gardening ranges.

So the problem that has to be asked is when does a DIY store cease to be a DIY store?

The normal answer would be to say that if core DIY is less than a certain percentage of sales, then the company should be classified elsewhere. But for DIY we take a slightly different line. The guiding principal should be the store’s authority in core DIY, irrespective of what proportion of group sales it takes. Consequently, the substantial product diversification at Homebase, for instance, does not invalidate its status as a DIY retailer. We exclude builders’ merchants such as Travis Perkins and Jewson.

For consumer spending, the major relevant categories to DIY retailing are outlined below.

For our retail sector sales and forecast we use the following category under the SIC 2007 categorisation.

As noted above, this year we also include a forecast for the Big-Box/’Sheds’ retail segment, which comprises B&Q UK, Homebase UK and Wickes, plus Focus DIY until its closure in mid-2011.

Financial definitions used are:

• Sales: Turnover as reported by the company, excluding VAT.

• Operating profits: pre-tax profits plus interest, less non-trading income such as the sale of fixed assets and any exceptional items, including provisions.

• Pre-tax profits: the net trading profit after deducting all operating costs including depreciation and finance charges, but before deduction of tax, dividends and other appropriations.

• Operating margin: operating profits as a percentage of sales.

Crown copyright material is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland.

• In general, all company sales data are quoted excluding VAT.

• Consumer spending data and sector sales data (including forecasts) are quoted including VAT unless specifically stated otherwise.

• VAT-exclusive consumer spending data is used to calculate market shares.

• The UK reduced the standard rate of VAT from 17.5% to 15% on 1 December 2008, before increasing it to 17.5% on 1 January 2010 and 20% on 4 January 2011.

Where a retailer reports in euros, the following exchange rates have been used for conversion to pounds sterling. Where a retailer has a non-calendar year-end, the closest calendar year rate has been used.

• Sales per sq m is the sales generated during the year divided by the average area traded from during that year.

• Sales per store is calculated using the average number of trading outlets during the year.