Kitchen Market ‘Real Growth’ Forecast by 2011

Sept. 9, 2010 - PRLog -- Research for the new report found that the recession cost kitchen retailers more than £160 million in lost sales over the last 2 years, reflecting lost sales of around £8 million per month.  The rapid sales decline in the last 2 years has clearly taken its toll on the kitchen market, with MTW stating that the number of kitchen installations fell by around 20% in 2008 and 2009, though this has since recovered to some extent in 2010.  

Discounting is a growing and contentious issue for kitchen retailers in 2010, with this activity causing concern across a wide range of product sectors in the kitchen market.  One leading kitchen retailer discussing the issue of, ‘…Price cutting, no matter what…’ stated that the issue of discounting was severely restricting value growth in the kitchen market, suggesting that ‘…Competitors must be giving it away…’   MTW’s report goes some way to supporting this view, with the analysis highlighting low levels of profitability for kitchen retailers coupled with share erosion in some kitchen product sectors as Internet, DIY and Supermarket channels continue to aggressively grow market share of the UK Kitchen market.  

Despite these and other threats identified in the report, MTW forecast that ‘more substantive, real term growth’ will return to the market in Q2, 2011, buoyed by rising consumer confidence, housebuilding and house moving activity, alongside value growth from product and service differentiation further boosting sales of kitchens.  
In terms of key sectors in the Kitchen market, the report indicates that fitted kitchen furniture accounts for the largest proportion of kitchen retailer sales in 2010, with installation revenue also significant.  Research for the report found that product development has sustained retailers’ shares of the higher value kitchen appliances market in 2010, with this set to continue in the medium term.  

Product innovation has also underpinned sales of higher value kitchen taps and brassware, according to the report, despite a ‘flight to price’ by many consumers resulting in the growth of sink and tap packages in the mid market kitchen sector.  Kitchen retailer sales of kitchen worktops also continue to benefit from the higher value solid surface sector of the market, with composite and natural materials such as granite and wood providing some impetus for market growth.  

As the kitchen industry looks forward to improved performance in the latter half of 2010, MTW’s report suggests that the threat of a ‘double-dip’ is diminishing and reasonable growth is now the most likely prospect for the remainder of 2010 and into 2011.  However, the report also sounds a note of caution with the findings that around 15% of kitchen retailers are considered at ‘immediate risk of failure’ and a further 20% regarded as having a ‘low or caution’ credit rating, highlighting the ongoing volatility in this channel of the kitchen market at present.  

MTW Research’s report is available to purchase for GBP 565 from www.marketresearchreports.co.uk or by calling 08456 524324

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MTW Research are a leading publisher of UK market research reports, databases and competitor analysis reports for a wide range of sectors including DIY, housebuilding market, environmental, construction, building, manufacturing and other industries.