Malcolm Scott | COMMENT AND OPINION
MALCOLM SCOTT OPINION
The WTA industry conference speaker and KBA corporate chair looks back on an eventful 2019 during which kitchen studios came out looking strong despite continuing prevarication over ‘getting Brexit done’
Independent kitchen studios specialising in imported kitchens began to add UK-manufactured products to their
offering as a hedge against Brexit
Another year – so what’s changed? O
in revenue from online activity. The USA and China embarked on the biggest ‘trade war’ ever, creating uncertainty in the global economy. Domestically, Theresa May resigned in June, with Boris Johnson taking over as Prime Minister in July. 2019 will be remembered as the year of missed deadlines in terms of Brexit. And total GDP growth was estimated at 1.2% against the reported fi gure of 1.4% for 2018, not a great year for growth, but a year when things did continue to move forward.
In business, in September the UK’s largest package holiday provider Thomas Cook Group went bust, while the rate of company liquidations and insolvencies during
and insolvencies during
n the global scene, Facebook received the largest fi ne imposed on a technology company for misuse of private data – a whopping $5 billion (£3.75bn) in July from the US Federal Trade Commission on top of an earlier $1.69bn fi ne from the European Commission in March for anticompetitive practices. These huge numbers demonstrate the massive growth
and kitchen multiple outlet groups. In Q1 Homebase closed 42 of its stores, leaving 107 still trading. Bathstore went into liquidation in July, with 91 stores closing and 44 stores being bought by Homebase, which will also add some Bathstore concessions inside its DIY warehouses. During March, B&Q announced the closure of a further 65 stores over two years, bringing their total down to 231 stores (as at H2 2018). During 2019, Wickes reduced its store network from 246 stores to 230 stores after 16 closures. But there were winners during 2019. Wren now has 84 shops up from 77 during 2018, while Howdens has opened 40 new stores, taking its total to 550. Ikea opened its 22nd ‘big box style’, 344,445sq ft UK superstore in Greenwich during 2019.
Independent kitchen studios had a good year during 2019, with the KBSA recruiting 10 new members and hosting its biggest ever conference and AGM in Warwick during September. During the conference, most members reported modest sales growth, and within the 200-plus showroom membership network there were no major failures during the year. Bespoke kitchen specialist Tom Howley (BHD Group) added new showrooms to its network, bringing the total to 17. Borshch Electrical opened a huge new showroom during Q3 at Erdington in Birmingham. UK furniture manufacturers, such as Symphony, Sigma 3 and Omega, experienced good growth during 2019 as independent kitchen studios specialising in imported kitchens began to add UK-manufactured products to their offering as a hedge against Brexit. Symphony also benefi ted greatly from its programme of support for builders merchants and independent electrical stores seeking to expand into kitchen retailing.
2019 was the highest for fi ve years, but was signifi cantly lower than for the fi ve years before 2014. Consumer passion for internet purchasing cooled a
little during the year. After hitting a peak of 21.5% of total UK sales during Q4 of 2018, internet sales as a portion of the total UK sales stayed at an unusually stable rate of between 18% and 19% for most of 2019. The ONS fi gures show that 2019 was the fi rst year for
more than 10 years where the proportion of total sales taken by the internet has not grown. Black Friday trading activity during November has over the past fi ve years consistently resulted in a short-term single-month peak between 2% and 3% higher than other months – 2019 fi gures demonstrated this trend.
2019 was a very mixed year for home improvement January 2020 · kbbreview Most appliance manufacturers had a reasonable year
for sales, but were signifi cantly down on freestanding, with reduced consumer confi dence manifesting itself in lower freestanding sales in all channels. 2019 was an exceptional year for house builders, with an 8% increase in homes built, resulting in more than 170,000 new homes being completed – the highest for 11 years. This helped to produce modest growth for most kitchen product manufacturers, with more sinks and taps, worktops, major domestic appliances, and more furniture needed for these new homes. This in turn generated business for a signifi cant number of kitchen studios who supply kitchens to smaller builders. So, despite Brexit and American ‘trade wars’, 2019 was not a bad year for much of the kitchen sector.
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