OPINION | Dave Ruston
DAVE RUSTON OPINION
Dave Ruston, director at Eureka! Research, delves into the results of kbbreview’s recent Retailer Survey to paint a picture of what the average KBB retailer looks like
Where do you sit in the market? R
egular readers will have seen the results of the recent kbbreview Retailer Survey that revealed the state of the UK’s KBB sector.
We were delighted to be involved and help take the survey ‘up a level’ in terms of the scale and scope of the questions, with responses coming from over 500 independent kitchen and bathroom retailers. It is quite clear that the sector is currently working at varying speeds, and this is particularly evident when we look at retailers operating at various ends of the market. Retailers at the higher end of the market are generally
feeling more optimistic about things. Although over half said their leads are down across the board, twice as many higher-end retailers (25%) reported having more enquiries than a year ago, compared with those operating at the lower budget end (13%).
Painting a picture
Over one-third said that a more innovative offer would encourage them to switch suppliers
Although conversion rates are typically consistent across most KBB retailers (about 60% of enquiries convert on average), there are some big differences in confirmed orders and business confidence. Lower-end retailers told us they now have an order book of 2.1 months, compared with higher-end retailers who have 3.7 months of confirmed projects in the calendar. The rate of economic slowdown is certainly more pronounced at the lower end of the market. Just under half (44%) of these retailers said their order books were now worse than 12 months ago, but only 36% of higher budget retailers reported this. In fact, one fifth (21%) of high-end retailers said their order book had improved. Two-thirds of KBB retailers in both the mid and high- budget brackets (67%) agreed that property market uncertainty and the wider economic backdrop are their biggest business challenges. Lower-end retailers were more likely to tell us that inflationary operating costs (57%) are causing headaches and the threat of being undercut by online retail (50%) continues to be a
Getting battle-ready
Regardless, most retailers said they were getting ‘battle- ready’ for a challenging 2024. In terms of staffing, retailers at the higher-end appear to be particularly upbeat. Just over a quarter (26%) reported taking on a new member of staff recently, and 22% have plans for new staff soon. Retailers at the lower end are simply seeking stability – two-thirds said their staffing situation is unchanged and only 8% have let employees go. Lower-budget retailers are more likely to be adopting a strategy of increasing prices (32%) and expanding the range of suppliers they deal with (37%). Just 9% rated the overall support they get from suppliers as excellent, which illustrates a high level of potential for switching. While better service levels would encourage retailers to switch, there is also a thirst for new products. Over one-third said that a more innovative offer would encourage them to switch suppliers and this is particularly attractive to higher budget retailers (47%). Suppliers, you have been warned. Finally, a word for the lead sponsor: Hettich. The quality of the research survey was improved by having a well-recognised brand involved, who helped us put a suitable engagement package together. We need more suppliers to come forward who see the value of conducting research that keeps pace with a rapidly- evolving sector.
Average costs for full-service projects, including fitting, across the KBB sector: HIGH-END RETAILERS
LOWER-END RETAILERS
Kitchens: £13,300
Bathrooms: £5,000
Order Book: ‘DWINDLING’ 2.1 months MID-MARKET RETAILERS
Kitchens: £25,000
Bathrooms: £14,200
Order Book: ‘CAUTIOUS’ 2.9 months
Kitchens: £41,200
Bathrooms: £27,600
Order Book: ‘STEADY’ • More insight about the KBB and home improvement sector can be viewed at
https://www.eurekaresearch.co.uk/ 30 • March 2024 3.7 months
significant threat at this end of the market. Just 30% of high-end retailers said e-commerce was a big challenge. Around two-thirds of KBB retailers said they are concerned about the impact of the cost of living crisis on future household spending. Confidence is clearly fragile among the retailers at the low-end of the market, where this rose to 73%. In contrast, higher-end retailers are more bullish – 58% of these said they are concerned, although one quarter claimed they are not concerned at all!
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