While business conditions in the kitchen and bath market have run the gamut from challenging to downright awful over the past few years, things finally seem to be looking up – at least a little.
Although no one seems to be projecting huge increases, kitchen and bath dealers do seem to be seeing greater traffic in their showrooms, with the majority expecting to be doing more kitchen and bath projects in 2011 as compared to 2010. Additionally, some dealers are already seeing significant improvements in business conditions, with the majority expecting to see continued improvement in the latter part of 2011 and beyond.
These were the findings of a recent survey that looked at dealers’ market outlook on the kitchen and bath industry, as well as business conditions and projections for future growth over the next few years. The survey, which polled more than 400 kitchen and bath dealers from across the U.S. and Canada, suggested a sense of cautious optimism, as many dealers expressed the sentiment that things are finally on the upswing in the kitchen and bath industry. The feeling seems to be that consumers are once again beginning to loosen the purse strings and invest in their homes.
But while survey respondents expressed positive feelings about the future, many still expressed concerns about the ability to close sales, or compete on profit margins. Equally important, the survey shows consumers spending less money on projects than in years past, while looking for more “bang for the buck.”
Ultimately, market conditions remain the driving force in the changes in the kitchen and bath industry, and the good news is that conditions do seem to be showing some modest improvement. In fact, when asked to rate business conditions in the kitchen and bath industry as compared to conditions in 2010, nearly 60% rated 2011 as “significantly better” or “somewhat better” than 2010 (see Graph 1). Roughly a quarter of those polled (27.93%) rated business conditions as “about the same as last year,“ while only 11.36% rated them as “somewhat worse” and a mere 1.68% rated them as “a lot worse” than last year.
Likewise, when asked how they expect business at their own kitchen and bath firm to be over the next 12 months, the majority (56.64%) said they expect it to improve a little, 16.82% expect it to improve a lot, 18.5% expect it to remain about the same, and 5.23% expect it to decline a little (see Graph 2). Less than one percent said they expect business to decline significantly, while 2.24% said they don’t know what to expect over the next 12 months.
Dealers surveyed were also asked when, specifically, they expect to see “significant improvement” in market conditions. Some 28.79% said they’re already seeing significant improvements, while 15.89% say they expect to see significant improvements later this year (see Graph 3). Another 16.07% expect to see things get notably better in early 2012, 19.81% expect significant improvements in late 2012, 11.03% expect it to take until 2013 for significant improvements, and another 8.41% don’t foresee notable market condition improvements until 2014 or beyond.
Jobs and Pricing
While kitchen and bath dealers have been talking about increased showroom traffic for a while now, up until recently there was some question about whether the added traffic was actually translating into sales. Most dealers agree that closing a sale takes a lot longer than it used to, as consumers do more price shopping, and take more time to come to a decision. Additionally, 2010 saw many consumers hiring design professionals for smaller jobs (countertop replacements, appliance upgrades, hardware or faucet and fitting change outs), rather than complete kitchen or bath remodeling projects.