Jan/Feb 2022

Contract BP Barometer Talk
COVID IMPLICATIONS FOR THE SECTOR
Business Pilot has released its first Barometer of the year, and Senior Analyst Neil Cooper-
Smith asks if Covid-19 has made the window and door industry better or worse off.
Figures for window and door sales last
month [December 2021] show a 38%
fall in sales. That’s a substantial but not
entirely unexpected drop: a lot of retailers shut-up
shop early for Christmas, while December is
historically also slower.
That also goes for January. Leads in December
were also down 44% – from 102 to 57 – which
means that the start of the year will be quieter for
many. Despite its size, the figure is unremarkable
given that we lost much of the month to the
holiday season.
Average order values by comparison were up from
£4,770 to £7,391 – an increase of 55%. Although
we’re having to join the dots, we’d argue that this
can, in part, be attributed to the pre-September
Stamp Duty holiday deadline rush in housing
completions.
Although conjecture, it would make sense that
a couple of months in, those who moved in
September are starting on home improvements,
and completing refurbishments.
At the same time, discretionary spend on single
(albeit bigger) ticket items, for example bi-folds,
are likely to have been impacted by the holidays
and lower seasonal appeal, increasing the
average order value overall.
What’s ahead in 2022?
At the start of 2022 Omicron continues to deliver
a dose of uncertainty. While there were signs in
December that supply chains were starting to
stabilise, the prospect of COVID-related disruption
continues to hang over the industry.
This aside, a number of factors which drive
increased consumer confidence, and therefore
their willingness to spend, continue to point in a
positive direction.
Average house prices rose again last month,
hitting a record average level of £254,822
according to the latest data from Nationwide
building society.
This represents an increase of 10.4% in the
12-months to December 2021 – an increase of
£24,000 over the past year – giving homeowners
more equity in their properties.
The challenge is inflation, which the Bank of
England predicts will peak at around 6% this
April, from the 5.1% already seen in November.
Analysts warn this is likely to be compounded
if, as expected, Ofgem lifts its price cap on
household gas and electricity bills in April,
something which could see domestic energy
prices increase by as much as 50%.
In summary, confidence in the housing market
means demand is going to be there in retail but
affordability is going to be far more of an issue
than it has been in the last 12-months.
Has Covid-19 made the window and door
industry more profitable?
The answer is, we’re probably never going to
know, but we think it’s worth considering that
the window and door industry was on target for
significant growth before the pandemic hit, at
around 5% year-on-year through to 2023.
The growth that has been seen in the last
18-months has been exponential, but it is by
definition going to be less sustainable.
What we can see is that year-on-year sales
December 2021 were down 23% on those for
2020. Go back a year further to the pre-Covid era
and December 2019, and they’re 60% lower.
So, could the industry have done better if COVID
hadn’t hit? It’s safe to say that the volume
wouldn’t have been there without it or, perhaps
more accurately, the Furlough scheme.
But there would have been more control, and
going into their year-end, we know there will be
retailers who won’t have been as profitable as
they expected, because of increased complexity
and cost of doing business during a pandemic.
Contact Business Pilot:
0333 050 7632
www.businesspilot.co.uk/
@BusinessPilotUK
CONNECTING THE WINDOW, DOOR & ROOF FABRICATION SUPPLY CHAIN
JANUARY/FEBRUARY 2022 T F 13