State of the market | ANALYSIS
kitchen appliances, that have seen KBB retailers struggling to keep up with the demand and order books full until September and beyond in many cases, many manufacturers have been reporting they had record sales in 2021. Hansgrohe said 2021 was its “most successful financial year in the company’s entire 120-year history”, with sales up by 27% to €1.36 billion (£1.14bn) from €1.07bn last year. The Miele Group reported its best sales year in its 123-year history. Sales hit €4.84bn (£4.08bn) worldwide in the 2021 business year, which was 7.5% up on the previous year, despite continuing semiconductor bottlenecks. Electrolux also saw record sales for 2021, with
turnover up 14.3% to SKr126bn (£10.8bn) and operating income up 18% to SKr6.8bn, while Whirlpool had its fourth consecutive year of record sales – up 13% to $21.99 billion (£16.4bn). Duravit, also reported record sales, with revenues topping €600 million for the first time ever. In the 2021 financial year, the bathroom products supplier saw sales soar 28% to €604m. So, with homeowners facing ever-rising costs, it looks like 2022 may be another challenging year. On a positive note, the housing market is holding
up, with house prices in 2021 up by 11% according to Halifax. Private house construction projects boomed post-lockdown – up 19% in 2021. But where previous forecasts (Glenigan) predicted they would rise 6% in 2022 and 5% in 2023, the latest figures from the Construction Products Association suggest a figure of just 1% for 2022 and 2023. Yet, with home improvements seemingly set to continue to be on the agenda for 56% of homeowners surveyed by Houzz in 2021, prospects for KBB sales may not be as bleak as the general economic outlook might lead us to believe. Most of our experts and kbbreview100 retailers believe that although the home improvement boom
JAYNE BARBER
The founder of analyst JKMR gives her outlook for the kitchens market JKMR believes the ‘catch-up’ boom from lost 2020 business is showing signs of beginning to have run its course. At
present, we believe it more likely the 2022 domestic kitchen market will see a fall rather than any significant rise in installations. However, we expect to see a further rise in overall market value at end-client buying price, driving the market past the £5 billion mark.
will not be going away anytime soon, it may not continue at 2020/2021 levels.
Paul Jenkinson, founder and managing director of LochAnna Kitchens, says: “A significant number of the kitchen projects being installed in early/mid 2022 will have been sold towards the end of 2021. Once this pipeline is installed, 2022 is likely to see demand normalise back to pre-pandemic levels. The home improvement boom of 2020 and 2021 will likely not continue in the way that it has been as many people begin to prioritise travel and holidays over home renovation and the market will undoubtedly get tougher.”
Sounding a cautious note, Leanne Adamson, marketing manager at Abode, adds: “We would like to think that the KBB market will benefit from the upturn in the property market, which is set to see incremental house price increases up to 2040. However, the war in Ukraine is
likely to have
unintended ripple effects and the International Monetary Fund has indicated that the UK is set for the slowest growth in the G7 next year. So I think a
Over the next 12 months, disposable incomes will be affected by rising utility costs and taxes, and consumer confidence in committing to ‘big-ticket’ purchases may start to waver. Rising interest rates will also potentially reduce budgets for major refurbishment. These impacts, however, are likely to disproportionately affect mass volume retailers, rather than kitchen studios that are more focused on higher-end budgets. New-builds will continue to see product specification move upward, but volumes are unlikely to hugely increase, limiting growth potential in this sector.
measured approach is necessary when planning for the short to medium term.” Trevor Scott, CEO of RFK, also sees Ukraine as a spanner in the KBB works, pointing out how it is already affecting the supply of timber products, while Ripples’ MD Paul Crow cites how it is impacting raw material supplies to the tile and ceramics industry. Jo Sargent, sales and marketing director at
Franke UK, however, doesn’t think there will be a step-change in consumer buying habits. She says: “I can’t see the home improvement boom going away any time soon. Over the past two years, we’ve been more invested in our homes than ever before, and this mind-set is not going to suddenly change. The full lifting of lockdown restrictions will play a part too, as more people feel confident in returning to physical retail environments.” At InHouse Inspired Room Design, MD Wayne also optimistic: “This trend for home
Dance is
improvement doesn’t seem to be slowing down, as we are seeing an increase in turnover as people emerge from lockdown and are looking to
There are still many reasons to remain optimistic. The housing market is red hot, which has a positive impact on the independents that supply kitchens and bathrooms to
new-build homes Bill Miller, MD, KBBG
June 2022 ·
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