ANALYSIS | State of the market
WHAT’S NEXT FOR THE KBB MARKET?
W
e’ve probably all lost track of the number of times experts have said that the KBB industry has been
through the most extraordinary two-and-a- half years in living memory. It’s been a rollercoaster ride and it doesn’t look as though things are going to revert to being ‘ordinary’ just yet.
Of course, the KBB industry fared better than
many. The pandemic forced many ‘non-essential’ retailers to close during the 2020 lockdowns but they proved adaptable and used Zoom and other online tools to keep projects ticking along until customers could again make appointments to visit showrooms in person, albeit battling against the ongoing shortage of skilled installers. Although sales dropped off a cliff initially, pent-up demand soon saw KBB retailers inundated with orders from customers who had built up their savings after a protracted period of working from home, not eating out and not going on holiday. Kitchen furniture sales, according to researcher
JKMR, dropped from £4.35 billion in 2019 to £4.2bn in 2020, but then came back strongly to hit £4.8bn in 2021, with forecasts predicting sales will top £5bn in 2022. UK bathrooms sales, according to figures from the Bathroom Manufacturers Association (BMA), which account for around 80% of the market, hit a record high of £1.2 billion in 2021, up by just over 20% from £980 million in 2020, and up even on 2019’s figure of £1.13bn. This gives a better indicator than some analyst figures that do not include all bathroom categories. Just when we all thought we were turning the
corner after the coronavirus pandemic and could look forward to times getting back to normal, we have a war in Europe, a squeeze on the consumer’s cost of living with soaring fuel and energy prices, and manufacturers hit by rising raw materials costs and supply chain problems likely to continue for some time to come. Inflation has hit a 40-year high at 9%. The Office of Budget Responsibility (OBR) predicts that figure
Consumers are facing a significant squeeze on household budgets as inflation soars ever higher and energy costs go through the roof. How will the KBB market weather the ups and downs of this looming storm? Chris Frankland investigates
will fall to 2% by 2026. Economists estimate that the pandemic caused the economy to shrink by 3%, while the OBR says labour market disruptions – which have hit the KBB installation sector – and barriers to trade following Brexit will shrink the economy by between 4% and 6% in the longer term.
As for consumers, The British Chambers of Commerce has revised its forecasts for growth in consumer spending in 2022 down from 6.9% to 4.4%, citing the squeeze on household incomes. Just how recent events have affected consumers is indicated by GfK announcing in April that its consumer confidence index was “in freefall”, plummeting to -38 from -26 in February – the lowest it has been since the financial crash in 2008 and worse even than the fall in reaction to Covid in April 2020. And the index that measures consumer views on whether it is a good or bad time for major purchases also plunged to -32, 20 points lower than the same month in 2021.
Despite supply chain disruptions, especially to
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· June 2022
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