Supplier Price Increases Hit Builders’ Merchants Hard

Builders’ merchants’ single biggest problem in Q2 2026 – by some margin – was supplier price rises, according to new data.

The research, carried out by MRA Building Market Reports (MRA Reports), includes a quarterly Pulse survey of builders’ merchant confidence, sales expectations and issues.

Rising Costs

Supplier price rises were seen as a problem by as many as 84% of merchants in Q2 2026, while 64% found squeezed margins to be an issue as merchants struggle to pass on price rises to their customers. It has also increased competitive pressures, including competition from DIY retail and online channels as customers switch to lower cost products.

Availability is becoming a problem for some products: 66% of merchant branches had struggled with lead times, while 58% had found product availability a problem. Over a quarter of respondents also saw online competition (37%), supplier service & support (30%) and poor demand (28%) as problems.

MRA Reports tracks problems and issues that affect merchants’ trading over time. In Q2 2026, more merchants mentioned that supplier price rises were affecting them negatively than in the previous two quarters.

The economic situation and fuel and energy costs were high on the list of challenges for the building materials sector. Merchants’ responses have moved from issues like skills shortages, regulation and the weather to more acute concerns such as staying competitive, which can mean having to absorb material price increases or fuel surcharges.

Merchants Hit Hard

It is telling that Survival and Product & Service Quality were introduced as key challenges for the industry for the first time in the Q2 survey. Some merchants report that quality of some materials, such as timber, has been variable.

MRA received a large number of unprompted comments from merchants on the topic.

“I’d say it’s the rising cost. Tradesmen like to be locked in on prices and there’s now fluctuation two to three times a month, and some of them up by 30%, it’s really hard to justify. It’s killing the trade in the sense that even if we are only more expensive than other merchants for a 30-day period then that customer will still go elsewhere,” one commenter said.

“The problem we’ve got as merchants is that prices are going up, but customers don’t want to hear it. In a market where we are trying to get a small piece of the pie, that is now a very small pie, it’s every man for themselves. I’ve been in the merchant industry about 18 years and it’s awful, we’re on bare minimum staff and are struggling to give customers better service,” added another.

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