One thing that news channels, politicians and the general public have been unanimous on over the past three years has been that the pandemic has been bad for business.
We will leave the arguments about the efficacy of lockdowns, the necessity of vaccines, the eye-watering government spending and who should have done what, when for another time. It is accepted wisdom that confining almost the entire population to their homes has inflicted huge but unavoidable damage across the economy.
But that’s not true for all parts. Some established markets enjoy something of a resurgence amid the “new normal”. Other, new markets sprang up and benefited mightily from the pandemic and its related restrictions.
The question for those industries that “had a good pandemic” is, what now? What happens next as demand potentially softens and the conditions that saw company values soar give way to a more challenging environment?
Plimsoll has analysed more than 1600 different UK markets and picked the following four that we feel have the most to lose now we are past the pandemic:
Hot Tubs & Spas
The spring and summer of 2020 saw the entire nation baked in 35° heat while restricted from leaving home for anything other than supply runs and 60 minutes of exercise. For those lucky enough to have a garden, the cost savings from lockdowns were often ploughed into creating garden oases. With travel completely off-limits for much of the past few years, people brought a dash of holidays to the home.
Plimsoll’s latest assessment of the market shows double-digit growth across almost an entire decade, then an explosion in demand in the most recent full financial year; 65% growth. Profits have followed suit peaking at 8% in the same period. As a result, average values across the Hot Tub market have jumped 31% this year.
However, what happens now holidays are completely unrestricted and the cost of living crisis is really starting to bite? The UK consumer confidence index has fallen to -40 as the food and fuel inflation eliminates discretionary spending. Having enjoyed an outstanding few years, could a serious fall from grace be set to hit the hot tub market?
PPE Manufacturers
According to the National Audit Office, the UK’s Department of Health & Social Care (DHSC) has spent an unprecedented $12.6 billion on 38 billion items of PPE due to the pandemic. In fact, amid the race for PPE at the start of the pandemic, the UK bought more than was ultimately needed and billions of pieces are being donated or destroyed due to expiry. Billions more were spent on PPE that was unsuitable for use.
For the UK’s leading PPE Manufacturers, the pandemic brought unprecedented demand, despite concerns about VIP lanes and opaque tendering processes. The latest Plimsoll Analysis shows growth for the latest financial year is up at 15% and average profit margins have soared to around 8%. Average values have risen an impressive 26% this year.
The DHSC has made clear that NHS hospitals and care facilities have excess stock. While the private sector, elbowed out in the initial rush for PPE might pick up some of the slack, which will leave a sizeable hole in demand for PPE. The saving grace is that due to the perishable nature of PPE, demand should eventually normalize - but it could well be an uncertain couple of years until it does.
Pet Accessories
Lockdown pups were in such high demand during the lockdown periods that it sparked a severe crime spree of stolen dogs. Across the country, cherished pets are being plucked by organised gangs for breeding or sale at an alarming rate.
Demand for new pets soared during lockdown with more than 3.2 million additions to family homes reported in 2021. With these new additions comes the demand for the assorted paraphernalia required to ensure a new pet settles in well. Pet accessory companies have enjoyed bumper sales with Pets At Home reporting record profits of £70m in 2021.
The latest Plimsoll Analysis shows Pet Accessory companies averaging sales growth of around 13% and seeing profits double to more than 4% in the latest year. As a result, average values have leapt by 28%.
However, the tide appears to be turning with the RSPCA reporting a flood of abandoned pets. Return to more normal working patterns and the soaring cost of living is forcing people to drop pets at rescue centres and even dumping them at the roadside. Fewer pets mean fewer accessories and the market could see prolonged declines in demand over the next couple of years.
Accredited Covid-19 Test Providers
A brand new market sprung out of the need for PCR and lateral flow tests when quarantine and infection prevention was at its height. More than 500 private companies were operating the testing network of the nation as we grappled to control the pandemic.
The latest Plimsoll Analysis shows the market averaging growth in the latest financial year at a massive 26% and profit margins rising to 7%. Company values have risen by more than a third in the latest year.
The testing industry, more than any other, is at the edge of a precipice. Testing is no longer mandatory. Infection no longer means isolation. COVID-19 has fallen off the news cycle and in the minds of the general population, we have moved on. Where does that leave an industry that has grown up around testing on an industrial scale that has been completely wound back? Can they pivot to other medical testing to make up for the shortfall or is the market due severe consolidation?
With thousands of UK and international markets covered, Plimsoll has an industry analysis that will show you what is happening to company performance and average values in your market today. We believe that business intelligence should be available on-demand and without disrupting your day-to-day. Our studies put the power of insight in your hands with graphical and written analysis that reveals where your competitors sit among its peers and what the future holds.
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