After a tough 2005, increased confidence in the conservatory market is being backed up with sales, says MRA's report for January to March 2006

Highlights this quarter:

  • On balance just over a fifth of conservatory fabricators reported an increase in sales in January to March 2006 compared with the previous three months.
  • A net 13 per cent of fabricators also sold more in January to March compared with the same period of 2005.
  • Looking ahead, a balance of 66% of fabricators expect sales to increase in April to June compared with the previous three months. Few anticipate a drop.
  • A net 48% also forecast better sales over the next three months compared with the same three months last year.
Prices

The average price of an installed conservatory in March was £7,543 (chart 3). This is an increase of 11% from £6,805 in December. The price excludes dwarf walls, bases and VAT.

Companies in the North (£9,121) reported higher average prices than those in the South (£7,139) or Midlands (£6,211). By company size, average conservatory prices were slightly higher for large firms (£7,978) than small (£7,748) or mid-sized fabricators (£6,837).

Conservatory Styles

43% of conservatories installed in March were Edwardians or Georgians. 30% were Victorians, and 20% were Lean-to conservatories. ‘Other' styles accounted for 7%.

Outlook

A balance of 31% of fabricators are more confident now about the overall prospects for the conservatory market than three months ago. Small and mid-sized firms (net 33%) are most positive, along with those in the South (40%).

A net 30% of fabricators expect the conservatory market to improve in 2006 compared with 2005. Of those anticipating growth, 42% expect rises of 20% or more.

Problems

The main problems facing conservatory fabricators in the last three months were price cutting in the market (72%), margin squeeze (69%) and low sales volume (58%). The single biggest problem was price cutting mentioned by 21% of fabricators.

Comment

‘Although 2005 was a tough year for conservatories,' says David Leng, Managing Director of Eurocell, which sponsors this survey, ‘2006 could be a turning point. House prices have stabilised leaving homeowners more confident and the economy is still growing.

‘Despite this consumers are holding tightly on to their purse strings. Conservatories are still high up on consumers' wish lists, but dreamers need converting into buyers. 18% of owner occupied homes now have a conservatory, according to the latest UK Conservatory Report from Michael Rigby Associates. That leaves a lot of homes needing a conservatory, and a lot of homeowners wanting one. But the market has changed, and conservatory companies will have to go to the market and compete for their business. Consumers need to be approached and tempted to buy.

‘Installers need to be proactive in generating leads, from a wider variety of sources including installation canvassing, customer databases using direct mail, maybe even conservatory parties! A major source of marketing, still overlooked by many companies in the industry is the internet. Some conservatory companies have no website at all. With Google's new ideas of tracking users to within 100-200 feet of their location to be able to provide them with advertising from local businesses, it is becoming increasingly relevant. You'll have to be hands-on if you want to make 2006 the year for you.'

With new technology and improved design, conservatories have evolved into a product with highly developed specifications and better performance giving home owners value for money.

The key elements to driving and refuelling this market in 2006 will be based on getting your supply chain right, tightening up customer care and educating your routes to market about product specification. This will counteract price cutting and give better direction in selling on quality, performance and best value.’

Mr Scott Dyer, Technical Data Processing Manager,
Stevenswood Conservatories, Livingston

The way ahead for the conservatory market is to reach and maintain high standards of product quality, customer service and networking down the line from manufacturer to end user. In order to achieve this and set standards in place there is need for commitment and leadership from systems companies and manufacturers. We have seen a 20% increase in the first quarter of 2006 compared with the same quarter of 2005. As part of a successful network, our professional and personable approach to selling secures our place in the industry.’

Mr David Vine, MD, Wunderplas Windows Ltd, St. Austell

Source

Glass Age

Postscript

The Eurocell Conservatory Roof Report is produced by Michael Rigby Associates. For survey details or a free copy of the full report visit www.521621.com or contact Lucia Di Stazio at MRA (tel. 01453 521621).