Retailer survey analysis | INSIGHT
What are the biggest fears for your business in 2023?
Again, consumer con - fidence and a predicted collapse in consumer demand
Our plan is to move into bedrooms, which will give us growth from our existing fitter base
came up time and again. Further exacerbating that, many retailers worry that, even if consumers are still looking to buy a kitchen or bathroom, they will find them too expensive after the widespread price increases suppliers are being forced to pass on to retailers. Supply chain stability, concern that the housing market could collapse and fears over how deep a recession might go were also mentioned by many of our respondents.
“My biggest fear is that we will see a deep recession in 2023,” said one bathroom retailer. “And that this will cause a substantial drop in consumer confidence and, therefore, purchasing habits.” Another said: “I worry that interest in our products and footfall through our showroom is going to stop because people simply decide to hold off on what is considered a ‘luxury’ purchase, to enable them to pay their bills.” However, it wasn’t all doom and gloom. One more optimistic retailer said: “We don’t operate in fear. We
are a company that always looks on the bright side and always pushes forward despite the situation. We are just disappointed in the state of the economy and that it might stunt our growth through no fault of our own.” Another said: “Much like we all got through the Covid lockdowns, this is about managing our own mind-set. Keeping focused and keeping our energy high, even when times are tough.”
How do you rate the current level of customer service you are receiving from your suppliers?
“Suppliers all seem to be struggling,” one retailer said. “Some of it’s down to poor investment decisions following the pandemic, in my opinion.”
Another retailer said: “I’m not sure anyone has the confidence in
their own supply chains and so suppliers are being very cautious and staffing levels have plummeted since Covid.”
What opportunities for growth do you see in 2023?
of retailers said that they expected their business to perform the same in 2023 as it did in 2022
39%
Suppliers – the good news is that an overwhelming number of respondents (77%) rated the service they get from their suppliers as average or good, with just 14% rating supplier service as poor. However, one major concern for suppliers that was flagged up by our survey was that 25% of retailers feel the service they are receiving is actually getting worse. And, in addition to that, 26% admitted they are considering changing their main suppliers in 2023.
Some of the reasons listed by those retailers who said they are considering changing suppliers in 2023 include to optimise competitive ness, reduce costs and protect themselves against lower internet pricing.
One retailer even went as far as saying they are considering moving suppliers because of “awful service, supply issues and a complete lack of communication”.
Now for the good bit. Highlighting the opportunities that retailers still believe will be out there next year, despite the economic uncertainty. In the survey, diversifying your product offering came out as an overwhelmingly standout opportunity for retailers in 2023. A number of kitchen retailers, for instance, said they would be looking to develop or enter into the bedroom category, while bathroom retailers said they were looking at introducing additional services and products, such as tiling, wall panelling and accessories, in a bid to appeal to a wider market. “We are building on our strengths gained over previous years,” said one retailer. “Our plan is to move into bedrooms, which will give us growth from our existing fitter base.” Interestingly, sustainability was also raised as an area of potential opportunity for independents – not just to use as part of your business story or to sell higher-value products in-store, but because more and more consumers are considering a company’s social responsibility strategy before using them.
And as utility bills skyrocket, it’s a way to help you cut back on your showroom operating costs. “It could well be a challenging year ahead,” one retailer said. “As a result, we have a plan to become greener and cut waste both in our showroom and on-site. We’re also aiming to increase our supply-only sales in the short term, in order to secure as much work as we can early in the year to help see us
through if the rest of the year gets tough.” While ‘investment’ and ‘economic uncertainty’ aren’t words or phrases you would normally associate with each other, our survey revealed that many independent KBB retailers identified marketing as a key opportunity, revealing that they are considering investing in developing their marketing activities as a result. “We’re working hard on our marketing and sales activities and hope we can maintain or improve on 2022 figures,” one kitchen retailer said. “I do think it will be a tough year, with costs increasing, but even that’s an opportunity – to create sales before prices rise further.”
The final word goes to this retailer, who urged others to focus on their strengths as an independent. “We have to continue doing what we do so well – offering good-quality products, service and price,” they said. “The market for our industry remains high, even in recessionary times. We may all just have to fight for our slice of a reduced market.”
December 2022 ·
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