Industry Shifts in K&B

Robert Isler

According to the NKBA /John Burns Kitchen & Bath Market Index (KBMI) release, one of the numerous industry shifts seen within K&B is the decision by consumers to seek better quality products and materials, mainly because of the ever-closing price gap between the high and low end. The report identified product quality and availability as the top consumer priorities. Backlogs that may now extend through the year, back-to-back years of double-digit price hikes, and increasing sourcing challenges and solutions are among other notable shifts.

The top challenges are little changed as supply chain disruptions continue to lead, scoring an 8.1 out of a possible 10 in severity. This is followed by the 7.8 score for cost of materials and 7.5 for the availability of skilled labor. This continuing triple threat represents a lethal mix, but so far has not put a damper on our industry’s health. While members are dealing with supply issues by resorting to second and third options to maintain timelines, the pricing challenge has garnered recent attention.

An average price increase of 13% was passed along to consumers in 2021, with the survey indicating that an additional 13% is in store for 2022 – at least that’s the maximum those in our industry say they are willing to pass along. Although design firms’ postponements and cancellations have hovered in the mid-50s percent range for the past three quarters, client frustration is growing. As one member noted, “I have upwards of 25 products that have gone up in price since the beginning of December. I adjusted product costs accordingly, and clients are not happy.” It’s a delicate balance to maintain margins. However, something has to give. As one respondent wondered, “How high will prices go before customers can’t afford to make major improvements to their homes?”

Not that supply chain disruptions and sourcing issues are any less concerning. According to this latest study, nearly all respondents say they are affected. Many claim longer cycles are beginning to impact revenue generation eventually trickle down to the bottom line. Cabinets are being substituted more than any other product, with 72% of industry professionals saying they are the most difficult to source. One respondent noted, “Clients are picking out multiple options for cabinetry in the hopes that at least one will be available.” Another lamented, “We couldn’t complete 25% of jobs in 2021 due to cabinet shortages.” Also consistently high on the list of product substitutions are faucets. As for other product sourcing challenges, refrigerators were mentioned by 64% of respondents.

Other changes covered in this report don’t involve market conditions but shifts in the popularity of materials across kitchens and bathrooms. Among the more notable ones on the upswing are quartz countertops, which 63% of respondents say have increased, vs. just 3% who claim the opposite. Composite stone sinks, frameless (European style) cabinet doors, single-control bathroom sink faucets, showers with more than one showerhead, and both quartz slab and tile shower walls have all gained considerably in popularity. On the flip side, only 8% of respondents feel that granite countertops have increased in popularity, vs. 55% who believe they have declined. Other notable decreases include cast-iron kitchen sinks, fiberglass, enamel steel, drop-in bathtubs/showers, and cultured marble shower walls.

Robert Isler is a Market Research Analyst at National Kitchen & Bath Association. He develops macroeconomic and industry survey analyses for nearly 14,000 member companies comprised of manufacturers, designers, showroom owners, and specialists across North America. He also disseminates reports on current and anticipated trends within the $158 billion kitchen and bath industry.

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