Market overview
Customers’ needs are local The customer base is fragmented. Professional contractors typically operate within 20 miles of their home base and may visit their local branch several times per week. In addition, they continue to increase the usage of digital channels which complement their working patterns.
Large supplier base Ferguson distributes over one million products from over 39,000 suppliers across the world.
Clear need for distributors in the supply chain
Ferguson plc Annual Report and Accounts 2020
Market characteristics and opportunities
Distributors, including Ferguson, bridge the gap between a fragmented supplier base and the large and geographically dispersed professional customer base.
Highly fragmented industry Our markets are typically highly fragmented, with few large players in the industry.
The USA continues to be our largest market with the greatest growth opportunities. It is highly fragmented with no market dominated by any single distributor.
Benefits of scale Due to scale benefits, market leaders can perform better through the economic cycle and customers have quicker access to products.
Strong organic growth opportunities Market characteristics support long-term organic growth opportunities.
Bolt-on acquisition opportunities Ferguson has a large database of targets to support continued growth.
Housing transactions
>5%
5.0–5.5m Moderate
Total population growth of more than five per cent is expected in the USA in the next decade.
Existing home sales continued to average between 5.0–5.5 million, remaining significantly below the 2005 peak.
Source: United Nations Department of Economic and Social Affairs.
Source: National Association of Realtors.
Consumer confidence Consumer confidence was lower in 2019/20 due to COVID-19 concerns. There is a correlation between consumer confidence and activity levels in our markets.
Financials
Population growth
Other information
Market growth drivers in the USA
Aging housing stock
Increased comfort levels in homes
Disposable income
43 years
95%
No. 1
The median age of homes in the USA is 43 years. There is high demand for repairs, maintenance and improvement in the large installed base of existing homes.
95 per cent of new single family homes in the USA have two or more bathrooms. There is a trend towards increasing levels of comfort in homes.
The USA has the highest levels of disposable income per household in the OECD.
Source: US Department of Housing and Urban Development.
Source: US Department of Housing and Urban Development
Source: Organisation for Economic Co-operation and Development (“OECD”).
Governance
Source: The Conference Board.
Strategic report
We operate in large, fragmented markets with strong growth characteristics
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