Supplier Price Increases Hit Merchants Hard, According to MRA Reports

MRA Building Market Reports (MRA Reports) latest update on the general builders’ merchant market, which includes a quarterly Pulse survey of builders’ merchant confidence, sales expectations and issues, shows that merchants’ single biggest problem in Q2 2026 – by some margin – was supplier price rises, mentioned by 55% of respondents.

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 & 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.

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.

Our Finding & Selecting a Market Research Agency feature looks at finding and selecting a specialist agency and also provides access to our index of over 25 UK-based firms specialising in construction market research

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.”

“Everything is on price at the moment, everyone is looking to get 50p off here and there, shopping around on the internet and not necessarily going for best quality just to save money.”

“Supplier price increases are costing builders. You’re adding 15% onto their jobs and they’re not going to get work.”

“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.”

“Issues with supply. For example, we do a lot of landscaping here, at the moment there is real lack of stuff from India and it’s not going to get any better.”

“Fuel surcharges. We are getting a £100 fuel surcharge each time we have delivery of sand, and the customer doesn’t want to hear about it.”

“At the moment I’d actually say the biggest challenge is just survival, survival of the business, that’s the main thing, and also rising costs such insurance rises, tax rises and business rate rises.”

The full report is now available to purchase. In order to find out more, click here.

Keep up to date with construction sales and marketing news.
Register for our free monthly newsletter:

Subscribe on LinkedIn