Residential Trade

Residential Trade forms part of Blended Branches and serves the residential RMI and new construction sectors with a large proportion of sales through the branch counters.

Key Highlights 2019/20:

  • One-hour Pro pick-up expanded to nearly all of our Blended Branches counter locations nationally
  • Continued to increase proportion of own brand sales
  • Further developed our mobile experience

Key products and services:

  • Plumbing supplies
  • Pipes, valves and fittings
  • Bathroom fixtures
  • Water heaters
  • Plumbing counters
  • Pro pick-up

Sales are typically made to plumbing contractors across both RMI and new construction. RMI contractors usually operate with a small number of vehicles and associates, working on small projects and day-to-day residential repair work. In these instances, their work is awarded based on their availability and the price and severity of the plumbing problem. The business is characterized by high order volumes, though average order size for RMI customers tends to be smaller. New construction contractors work on a range of projects from single homes to mid-sized housing developments and are typically contracted by construction firms. This type of work is usually awarded through a tender process in advance of the project.

During the year we adapted our operations to offer curbside pick-up while the counters were closed to walk in customers amid the COVID-19 pandemic. We rapidly reopened the branch network with enhanced cleaning protocols and protective equipment when it was appropriate to do so. Additionally, we successfully expanded our one-hour Pro pick-up service to nearly all Blended Branches locations across the USA. This service is available to customers through all of our order channels.

Own brand continues to be a key part of our strategy and we have continued to make good progress in this area over the year. These products offer higher gross margins than branded equivalents and provide additional customer choice. One area of success during 2019/20 was the growth of Jones Stephens, a previous acquisition, across the network which resulted in a significant increase in own brand sales penetration within our rough plumbing segment.

We continue to diversify our product offering through multiple brands to attract and retain a larger base of customers while aligning prices based on our cost to serve. We also continue to work on our digital presence providing mobile and inventory management for our customers. A highlight on the mobile experience during the year has been the roll-out of customer specific pricing tools.

Our focus in the year ahead will remain on progressing the omnichannel experience within the Residential Trade business by improving the connectedness of our in-store, online and mobile offerings. Customers’ adoption and usage of online channels has increased significantly during the COVID-19 crisis. We are also reviewing how we can better partner with plumbing customers at a project level rather than focusing on product requirements.

Ferguson is the number two in residential trade in the USA with an estimated market share of 18 per cent. The estimated combined market share of the top three companies is 52 per cent with much of the market fragmented between midsize regional distributors and small, local distributors.

To read more around how our associates live our values in the residential trade business click here