Independent Merchants vs. National Merchants: Who’s Really Performing Better?

In the evolving landscape of the UK building materials sector, the debate over the performance of independent merchants versus national merchants has become more relevant than ever. With market conditions tightening and customer expectations rising, both models face unique pressures—and opportunities.

🧱 Defining the Two Camps

• National Merchants: Large, often publicly traded companies like Travis Perkins, Jewson (now part of STARK Group), and Selco. They operate multiple branches, often with standardised processes and centralised buying power. Shareholders have lots of control and overheads are at a premium.

• Independent Merchants: Typically family-owned or regionally operated businesses. They may have a handful of branches and pride themselves on service, flexibility, and local relationships. They do not have the brand awareness of the nationals.

  
  

📈 Sales & Market Share: Nationals Lead, But...

National merchants command a larger share of the market thanks to their footprint, infrastructure, and brand recognition. However, recent industry reports suggest that independent merchants are punching above their weight in terms of profitability per branch and customer loyalty. I know first hand how both camps work and in this current climate, independents have so much more adaptability and while the nationals often chase volume, independents are more agile in adapting pricing strategies, stock mix and local customer needs which in turn allows them to maintain healthy margins.

🧍‍♂️ Customer Service & Loyalty: Independents Take the Edge

The personal touch of independents often creates stronger bonds with local tradespeople. Decision-makers are on the shop floor, relationships run deep and account holders often have long histories with their merchants.

Nationals have made progress with digital services and CRM tools, but many still struggle with bureaucracy and turnover, which can dilute the customer experience. The need to focus on how the customer really matters to a national company, is the key ingredient.

Bottom line: Where loyalty matters, independents often win.

🔄 Agility & Decision Making

I've touched on this briefly but Independent merchants can turn on a sixpence.

Whether it's negotiating credit terms, bringing in a bespoke product line, or reacting to supply chain shocks, independents are far more nimble than their national counterparts. With buying groups for the independents being strong along with the support of fantastic owners/directors of builders merchants... it continues to grow the independent knowledge bucket. National merchants, hampered by layers of approval and policy, can find themselves slow to react.

🧮 Investment in Tech & Infrastructure: Nationals Have the Budget

One area where nationals do excel is in investment—in systems, logistics, and marketing.

However, tech-savvy independents are beginning to bridge the gap. With access to cloud-based merchant software and buying groups offering support, even small players are levelling up.

🛒 Product Range & Pricing: A Mixed Picture

Nationals enjoy economies of scale when it comes to buying. But those savings aren’t always passed on to the customer. In fact, independents often price more competitively on core lines, thanks to sharper stock control and stronger supplier relationships.

Furthermore, independents are quicker to tweak their ranges based on local demand, whereas nationals often operate from a more rigid, centralised and head office programme.

Asking the people on the ground and the local customers what really matters in product ranges is the best way to increase sales and margin.

🧑‍🤝‍🧑 People and Culture

Ask anyone in any merchant: Culture Matters! - My most passionate part.

Independents (including a recent business I ran) really drive the 'family' feel where everyone is together, in the trenches. Listening to the customer is the real key here. Adapting your business to drive customer satisfaction.

The need in our industry to invest in people by coaching them, mentoring and supporting peoples knowledge and growth is of paramount importance. It is pivotal for maintaining and growing the industry we all love so much.

🏁 So, Who's Winning?

It’s not a zero-sum game.

• Nationals win on infrastructure, scale, and brand power.

• Independents lead in agility, service, and profitability per customer.

Customers who now expect both professionalism and personality—and will vote with their feet.

The real winners - The businesses that start investing in their people.