Our Industry

The key characteristics of our industry are:

 

Large vendor base

There are a large number of vendors in the industry producing an extensive range of products. They need distributors in order to access customers effectively. Wolseley distributes the products of over 70,000 vendors across the world.

 

Many customers

The customer base is very large, with the majority of customers being small, locally based businesses. These customers require high levels of availability of many products often for same-day or next-day pick up or delivery, and rely on the distributor to provide this. Wolseley services approximately 1 million customers across the Group.

 

Customers' needs are local

Professional contractors typically operate within around a 20 mile radius from a local branch and may visit it several times a week. Customers value high product availability, knowledgeable branch staff, speed and efficiency of service and competitive prices. In addition to visiting branches customers are now using emerging channels such as e-commerce which complement their working patterns.

 

Clear need for distributors in the supply chain

Distributors bridge the gap between the large vendor base and the large and geographically dispersed professional customer base. The range of customers, vendors and products provides a large profit pool available to distributors.

 

Highly fragmented industry with no market dominated by a single player

Our markets are highly fragmented, with few large players in the industry. For example, Ferguson, Wolseley’s US plumbing and heating business, is the largest player in the USA with a market share of around 17 per cent and the business is around twice the size of the No 2 player. The top 4 businesses in the US plumbing and heating market account for a combined market share of approximately 36 per cent. This presents significant opportunities for market consolidation, both through like-for-like revenue growth and in-fill acquisitions. 

 

Low barriers to entry

The industry is characterised by low barriers to entry. Whilst some similar competitors are able to offer an attractive service proposition, Wolseley’s scale provides us an opportunity to leverage best practice across the Group.