Thursday, March 30, 2017

Brexit and the shed industry

It's not a vast survey, but every little helps. To find out what the effects of Brexit might be for the garden buildings market, spoke to Mercia Garden Products and Shire Garden Buildings to ask for their views. According to WhatShed, both manufacturers supply a significant percentage of the total volume of garden buildings sold in the UK both online and via ‘Blue Chip’ high street retailers.
Here are their findings:

    •    Currency swings following decision to leave EU (21% drop in value) have seen large increases in imported raw materials. Imported timber/materials typically make up 66% of the final costs the consumer pays.
    •    Currency fluctuations have caused a typical 14% cost increase to manufactures.
    •    To date the manufacturers have absorbed the costs, due to many ‘Blue Chip’ retailers who had fixed price agreements in place. To date this has insulated consumers from any price rises.
    •    Price increases will now be passed on to consumers starting in April 2017. “As the dust has settled, and reality set in, this has now led to ‘Blue Chip’ customers accepting cost price increases, albeit very reluctantly,” said Terry Waldron, MD for Mercia Garden Products.
    •    Price rises consumers are likely to see in 2017 will range from an 8% to 10% increase.
    •    Manufacturers are actively working hard to reduce capital projects intended to reduce costs to combat the remaining effects of the increases. This means potential job freezes or cuts are likely.

"On a positive note, overall, sales of buildings have risen over the last two years and it appears that this is continuing for 2017," said a spokesman for WhatShed. "The focus is once again on staying at home and improving all aspects of it. More people are expected to have 'staycations' this year due to the weak pound, so they are more likely to make the most of their gardens and garden buildings. The continues a growing trend for bespoke buildings and this again still appears to be strong in 2017. This aids the UK manufacturers due to higher margins.
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Thursday posts are sponsored by Cabin Master: garden offices and studios to fit any size garden. Top quality contemporary or traditional buildings.

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