December 7, 2021

Business Seen Gaining, Although Headwinds Thwart Growth

EVANSTON, IL — Business for kitchen and bath design firms remains robust, and is projected to continue on an upward trajectory, as the impact of COVID-19 recedes and remodeling demand continues at record levels. But despite the bullish forecasts, dealers and designers remain hamstrung by several significant challenges – most prominent among them rising product costs and lingering disruptions in the kitchen/bath product supply chain.

Those are among the key findings of a major new survey conducted on behalf of Kitchen & Bath Design News by its exclusive research partner, the Research Institute for Cooking and Kitchen Intelligence (RICKI). The nationwide survey, conducted in mid-May, involved nearly 250 kitchen and bath dealers and designers, including those at firms that maintain a showroom as well as those who operate independently.

KBDN’s survey findings mirror those of other recent polls, which have found that demand for kitchen and bath remodeling is at an all-time high as COVID-19 vaccinations continue, previously postponed projects resume, and both permanent and hybrid work-from-home lifestyles prompt homeowners to reconfigure their residences. However, even as the pandemic’s impact continues to dissipate, project backlogs are reaching upwards of three to six months due to supply chain delays resulting from a combination of record demand and factory closures in the initial stages of the pandemic.

By far, the two greatest challenges that dealers and designers say they currently face are rising product/material costs (82% of respondents) and longer lead times on product deliveries (81% of respondents). Some 54% of survey respondents report that they cannot easily access installers, subcontractors or other labor needed to handle the projects they sell, while other challenges pale by comparison.

Among the wide range of kitchen and bath product categories, supply chain disruptions are most severe in the cases of appliances and cabinetry, survey recipients say. And most surveyed dealers and designers believe that the supply chain disruptions won’t end anytime soon. Specifically, 50% of surveyed dealers and designers believe the disruptions will continue throughout 2021. Another 20% anticipate the disruptions will last only through this fall. On the other hand, a significant number (17%) believe the delays will persist into 2022, and 6% say they have “no idea” when the disruptions will end.

Other survey findings included the following:

  • Three in four dealers and designers polled by KBDN report that project requests are currently higher than they were a year ago, when the impact of COVID-19-was far more pronounced. More specifically, 26% of those surveyed say requests are much higher, while 48% say they are somewhat higher. In contrast, only 5% say project requests are somewhat lower, and another 5% say they are much lower.
  • Two in three dealers and designers surveyed say they expect to design and sell more kitchens in 2021 than they did in 2020, when the median number of kitchens completed was 14, with designers and dealers associated with a showroom completing significantly more than independents (an average of 31 versus 6). The average price for a complete kitchen remodel in 2020 was $49,700, with independents reporting a higher average price tag ($64,700 versus $44,000) than those associated with a showroom.
  • More than half the survey respondents expect to design and sell more baths in 2021 than they did in 2020 when the median number of baths completed was nine, with designers and dealers associated with a showroom completing significantly more than independents (an average of 18 versus 6). The average price for a complete bathroom remodel in 2020 was $26,400, with independents again having a higher average price ($32,300 versus $23,500) for those associated with a showroom.
  • Half the surveyed dealers and designers anticipate that their 2021 profit margins on the kitchens and baths they design and sell will increase compared to 2020. Half say project pricing is more important now compared to this time last year, while 43% say the importance of project pricing is currently about the same as in the past.

The post Business Seen Gaining, Although Headwinds Thwart Growth appeared first on Kitchen & Bath Design News.

Did you miss our previous article…
https://www.texaspiekitchen.org/?p=549