“People are moving to get jobs and cannot unload their houses,” observes a dealer from Witchita Falls, TX. “Many need repairs or remodeling to sell, and my challenge is to price it right to win the work.”
Consumers and profit
Pricing and tighter profit margins are of great concern again this coming year, with customers looking for everything for next to nothing, according to dealers and designers.
“Customers expect business to be so bad that they can demand ridiculous pricing benefits,” reports Dorrit Ory, owner, Orygon Home Center in Florence, OR.
Alicia Schell, designer, Kitchens Etc., By Regency in Jacksonville, FL agrees, noting, “Clients expect the same quality and service but at a much lower cost.”
Adds another responder, “People have less money to spend but the same expectations as far as amenities and quality.”
Lou Rohl, COO/managing partner for ROHL in Irvine, CA notes that consumer confidence, especially among the affluent, is key to the recovery of the kitchen and bath industry. “Homeowners are continuing to view their homes as a worthy investment – not for reselling but for reconnecting,” he comments.
Connie Crawley, designer – sales manager, Floor to Ceiling Interior Design Center in Wayzata, MN, agrees: “Reminding clients that updating their homes still makes sense regardless of the home value market” will be key this year. “Updating their homes needs to be more about the enjoyment of the home meeting their needs instead of return on investment,” she notes.
“The recovery or lack of recovery of the economy – including the addition of jobs that contribute to a middle class lifestyle as well as recovery of the housing market – will help give homeowners the desire and confidence as well as financial resources to invest in their homes,” comments Susan Serra, CKD, president of Bornholm Kitchen in Huntington, NY. “It’s really all about consumer confidence.”
A survey responder in Palatine, IL believes that in 2012, the challenge will be to “find customers who can afford to remodel with the confidence that they can do so.”
The political scene
Also nodding directly to the economy is survey responders’ concern about the presidential election and what the pre-election inactivity will do to the economy and the mood of the nation.
One dealer’s sentiments that “change will only come after the current presidential administration is replaced” was echoed by many. “We need leaders who understand small business as the driving force in the economic recovery,” the responder notes.
“The poor leadership by the current administration produces an unproductive business atmosphere,” adds another survey responder.
Some manufacturers also believe the election is paramount.
“One of the key issues that will have an impact on 2012 is the election and concern of stagnation and gridlock with elected officials during the course of 2012 until the presidential election is completed,” comments Don Gamble, executive v.p. of Basco Shower Enclosures in Mason, OH. “This issue will drive no appreciable reduction of unemployment rates, which in turn continues to stifle growth in the housing sector.”
Tom Beyersdoerfer, CFO, Stone Statements Inc. in Cincinnati, OH, believes “the media and Congress need to stop painting a gloom and doom picture.”
“If the negative press continues to influence consumers to hold onto their money instead of spending, the year will be flat for big growth,” concurs Brian Borsch, sales manager, Capitol Group Kitchen & Bath, in St. Louis, MO. “When the press switches to an optimistic theme, pent-up demand will move the country out of the recession.”
Jeff Noll, president, and Jeff Carney, v.p., Steamist in East Rutherford, NJ note that Americans will only wait so long before they treat themselves to that new bathroom or kitchen. While the plans may not be quite as grand as they might have been five or six years ago, Noll believes consumers want to treat themselves to “affordable luxury.”
Politics can also impact environmental legislation, which in turn impacts the kitchen and bath market. For that reason, although kitchen and bath dealers and designers don’t see the green trend as having great importance, many manufacturers see green issues as a major concern going forward.