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Viewing report
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China & Earthenware Market Report 2007
Key Note Publications Ltd, April 2007
The value of UK manufacturing sales of ceramic household and ornamental articles fell by almost a third (32.6%) between 2002 and 2005, to be worth £310.7m by 2005. The value of retailers' sales of china and earthenware, meanwhile, remained almost static between 2005 and 2006, and is anticipated to grow by 0.2% in 2007.
2006 proved to be yet another tough year for the UK's ceramics industry as it faced further cutbacks driven by competition from overseas operators, over capacity and downward pressure on prices. Thousands of jobs have been lost over recent years and there seems little proof that any contraction in the industry is slowing. One of the latest corporate casualties has been Royal Stafford, which went into administration in December 2006, although efforts continue to find a new buyer for the company as a growing concern. Meanwhile, the industry's largest employer, Wedgwood, continues to shed jobs in a reorganisation aimed at returning the company to profit, and further job losses have been suffered at the Tams Group, Spode and Wade Ceramics.
The retail scene in the global market is dominated to some extent by giant retailers, which have greater bargaining power than suppliers. They push hard for low prices, resulting in an ongoing trend of outsourcing production to low-cost areas, including the Chinese mainland, while UK manufacturers struggle to make any profit on goods produced in the UK.
On a more optimistic note, however, the volume of retail sales of all consumer goods in the 3 months from October to December 2006 was 1.4% higher than in the previous 3 months, with the strongest growth in volume sales seen in non-store retailing, particularly of non-food items. Furthermore, according to the latest Distributive Trades Survey from the Confederation of British Industry (CBI), published in late January 2007, high-street retailers exceeded expectations to record their strongest New Year sales growth for 3 years. 51% of retail respondents to the monthly survey said January 2007 sales volumes were higher than a year ago, despite a surprise interest rate rise in the period, while only 21% said they were lower.
There is no disputing that the UK ceramics manufacturing industry faces more difficulties ahead, but it remains a vibrant one, ready to face the challenge. It is renowned for its innovation and design skills, and being a part of British heritage. Unable to compete with overseas suppliers on a mass-production basis, it must concentrate on the design-led premium end of the market for its survival, which is particularly crucial to the Stoke-on-Trent area.
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