Domestic Lighting - UK - May 2004

SUMMARY

The market for domestic lighting in the UK has enjoyed a period ofunprecedented growth during the past five years, with both main sectors of themarket, luminaires and lamps, recording real sales increases of more than afifth in this period. The reasons for this growth are many and varied butinclude positive economic and demographic factors, as well as a boom in homeimprovements, prompted by the glut of TV programmes and magazines dedicated tothe subject.

Through exclusive consumer research and authoritative marketanalysis this report provides insight into all the key issues facing theindustry, including:

•  Economic and demographic factors that have combined to propel thedomestic lighting market forward
•  The impact of increased media coverage, such as home style-relatedTV programmes and magazines
•  Changing working patterns influencing the domestic lighting market
•  Analysis of new product development with in the sector
•  Sales of light fittings and shades
•  Exclusive consumer research into types of lamp/light bulbs bought
•  An assessment of the degree of commitment/enthusiasm/loyalty for aproduct range or brand/retailer

Products covered in this report are known to the lighting industry as lampsor light sources and luminaires. Consumers would be more likely to recogniselamps or light sources as bulbs and tubes and luminaires as lights, lamps orlight fittings.

The lamps sector covers tungsten filament bulbs and stripsdesigned for domestic use (including specialist bulbs), halogen bulbs andstrips, and compact fluorescent lamps or CFLs.

Luminaires incorporates table,ceiling, spotlight, wall and floor fittings, as well as shades sold separately.

TABLE OF CONTENTS

Introduction and Abbreviations

Definition

Consumer research

ACORN

Advertising data

Abbreviations

Executive Summary

Media, economic and demographic factors propel market forward

Sales of fittings and bulbs up by a fifth

Spotlight boom boosts reflectors; CFLs and halogen also growing fast

Big three players dominate lamps

Low spend on advertising

Sheds gain ground

Old lamp favourites still popular as new products gain ground

Growth in energy-saving and halogens will drive lamp sales

Market Drivers

Environmental considerations

Favourable legislation

Levels of demand

Figure 1: UK households and one-person households, 1999-2008

More households, more fittings

Moving home and owner-occupation

Figure 2: Trends in housing transactions and numbers of owner-occupieddwellings in the UK, 1999-2008

Impact of contract market on styles

Changing rooms

Under the influence

Show me the money

Figure 3: PDI and consumer expenditure, at current and constant 1999prices, 1999-2008

A different class

Figure 4: Trends and projections in the UK adult population, bysocio-economic group, 1999-2008

The 'live to work' generation

The age factor

Figure 5: Trends and projections in the UK population, by age group,1999-2008

Shady outlook

Ray of light for the demographic outlook

Market Size and Trends

Luminaires (Light Fittings and Shades)

Figure 6: UK retail sales of domestic luminaires, 1999-2004

Strong sales growth boosts market value

Trend towards more fittings

Consumers trade up

Lamps (bulbs)

Figure 7: UK retail sales of lamps, by value, 1999-2004

Lamp growth reflects gains in luminaires

Move away from standard lamps boosts sales

Figure 8: UK retail sales of lamps, by volume, 1999-2004

Decline in conventional lamps

Energy savers stunt volume growth

Market Segmentation

Luminaires - Desire for targeted/mood lighting dictates trends

Figure 9: UK retail sales of luminaires, by type, 2001 and 2003

Ceiling fittings still growing

Spotlights conceding the spotlight

Shade sales plummet

Wall fittings lose popularity

Floor fittings on the up

The low-down on lamps

CFLs and halogens continue to shine

Figure 10: UK retail sales of lamps, by type, by volume, 2001 and 2003

Figure 11: UK retail sales of lamps, by type, by value, 2001 and 2003

Tungsten still dominant

Standard pearl lamps lose ground

Reflector lamps grow on back of spotlight's boom

CFLs benefit from switch to energy-saving lamps

Trend towards compact fittings boosts halogen

The Supply Structure

Luminaires

Companies and brands - luminaires

Ring Ltd

Micromark

Cascade Electrolite Ltd

Där Lighting Ltd

Others

Lamps

Figure 12: UK brand shares in the lamps sector, 2001 and 2003

Own-label - whose label?

Companies and brands - lamps

Philips Lighting

GE Lighting Ltd

OSRAM Ltd

Others

New Product Development

Fashion leads NPD

Low voltage for lamps

LED leads innovation

Designer moods

Advertising and Promotion

Low spend fluctuates

Figure 13: Main monitored media advertising expenditure on lighting,1999-2003

DIY sheds dominate adspend

Below the line

Visual promotion

Online promotion

Distribution

Sheds grow share of luminaire sales

Figure 14: UK retail sales of luminaires, by type of outlet, 2001 and 2003

B&Q leads march of sheds

Specialists struggle to compete

Department/variety stores make gains

Mail order/catalogue retailers hold their own

Mixed fortunes for other retailers

DIY sheds make inroads into lamp sales

Figure 15: UK retail sales of lamps, by type of outlet, 2001 and 2003

Grocers fighting to maintain leadership

Sheds' sales boom

Variety and department stores hold station

Other outlets relatively unimportant

The Consumer

Figure 16: Types of lamp ever bought, 1999 and 2004

A boost for the environment

The need for consumer education

Fashion dictates sales

Bulb buyers

Figure 17: Types of lamp ever bought, by gender, age and socio-economicgroup, January 2004

Environmentalism at large

The DIY enthusiast and specialist lighting

The importance of children

Figure 18: Types of lamp ever bought, by lifestage, presence of childrenand Mintel's Special Groups, January 2004

Children under the spotlight

Third age renovations

Home ownership - the DIY catalyst

Figure 19: Types of lamp ever bought, by household size, marital status,working status and tenure, January 2004

Existing fittings promote lamp sales

Lights off in London

Figure 20: Types of lamp ever bought, by region and ACORN categories,January 2004

Utilising the media

Figure 21: Types of lamp ever bought, by media usage, supermarket usageand commercial TV viewing, January 2004

Increasing contemporary lighting offering

How many heavy viewers does it take to change a lightbulb?

E-targeting the environmentalists

Fluorescent strips for the older generation

Figure 22: Types of lamp ever bought, by gender, age and socio-economicgroup, January 2004

Subtle nuances lost on the young

Figure 23: Types of lamp ever bought, by lifestage, presence of childrenand Mintel's Special Groups, January 2004

Starter packs for the inexperienced

Soft tone for soft DIY

Figure 24: Types of lamp ever bought, by household size, marital status,working status and tenure, January 2004

Boosting décor lacklustre

Figure 25: Types of lamp ever bought, by region and ACORN categories,January 2004

Premium displays

Figure 26: Types of lamp ever bought, by media usage, supermarket usageand commercial TV viewing, January 2004

The Future

Household growth fuels market

Better homes

Relocation, Relocation

And of course...Changing Rooms

Lighting-savvy

Increasing market value

An environmentally friendly boost

The threat from direct importing

Lack of branding leaves suppliers vulnerable

Sheds to increase luminaires share

Grocery retailers lose out on lamps

Balancing act for lamp suppliers

Status quo for lamps supply

Forecast

Figure 65: Forecast of the UK domestic lighting market, by sector, 2004-09

Luminaires still lead the market

Lamp sales will continue to be driven by energy-saving and halogen lamps

Figure 66: UK retail sales of lamps (lightbulbs), by volume, 2004-09

Factors incorporated

Appendix: Research Methodology