“The cost of living crisis facing consumers is expected to bring about a further set of challenges to a kitchen market only recently recovered from the pandemic. In particular, a focus on value from buyers can be expected. Online is also expected to grow further in popularity adding further to pressures for manufacturers and retailers.”
That’s the market summary from Neil Mason, retail category director at Mintel, writing in the analyst’s UK Kitchens and Kitchen Furniture report published last September.
In fact, against the backdrop of high interest rates and inflation still circa 10%, Mintel expects UK expenditure on kitchens and kitchen furniture to have shrunk 1.3% in 2022, following growth of 2.7% in 2021. It also predicts that the sector’s challenges will continue through 2023 into 2024 as more consumers rein in spending.
“Trading down is likely to benefit, with a move towards lower cost replacement purchases as opposed to full refits also likely,” says the report.
Like the rest of manufacturing industry, kitchen producers have also had to deal with raw materials price inflation and supply issues. According to analyst JKMR in its Overview Report on the UK Fitted Kitchen Market, these peaked in 2021, with prices of some key materials, including of course timber, coming off their pandemic period highs in 2022. But not all supply issues were resolved.
“In 2021 producers faced both raw materials and finished components ‘log jams’ from a combination of Covidrelated factory shut-downs, shortage of shipping containers and ‘freak’ hold ups, and post-Brexit import changes,” said the report. “While most of these issues began to ease by the end of the year, they all created increased costs and/or cash flow problems. For the consumer retail side these have been compounded by the ongoing industry problem of lack of experienced installers.”
Looking at market share, Mintel says the winners in recent years have been the kitchen multiples with their slice of sales rising 5.9% from 2017-21, largely at the expense of the DIY sector. The other gainers in this period were merchants, whose share rose 3.3%.
The market leader Howden has continued to make enviable strides in the market. According to JKMR, its refurb installations dipped in line with market contraction from 390,000 in 2019 to 368,000 in 2020, but rebounded to 418,000 in 2021 and to 451,000 out of a total UK market of 1.264 million installations in 2022. The company also continues to expand in the new build fitted kitchen market, with JKMR estimating that its share of the sector hit 10.7% last year.
Multiples as a whole also continued to grow market share from 2020, taking 51% of all fitted kitchen sales in 2022, according to JKMR. While neither Magnet nor Wickes returned to pre-pandemic sales levels, it said, they did regain ground, while B&Q continued to increase activity.
Specialists’ market share has contracted over the last three years, says the report.
“In 2019 it fell considerably to 12.25%, with studios unable to offset growing competition from Wren,” it states. “2020 saw those that focus on upper-mid and above do well, but others found it ever more difficult to trade against Wren. 2020 specialist share of 12.75% was still below 2018 levels and 2021 saw it drop to 12.1%, due in part to fitting and major domestic appliances (MDAs) supply ‘log jams’, which continued to impact studio activity in 2022.”
New store openings and “substantial advertising outlay” saw Wren’s market share rise from 7% in 2019 to 9.6% in 2021, and JKMR expects it to have topped 10% in 2022.
The ‘other retail’ sector has continued to lose ground, with IKEA’s ‘family day out’ shopping model particularly affected by the pandemic and other players withdrawing from the kitchen market, notably Screwfix, says JKMR.
Direct contract sales to construction accounted for 12.1% of fitted kitchen sales in 2019, falling to 11% in 2021. In 2022 JKMR estimated it contracted further to under 10.5%. At the same time, it said, not just Howdens but also B&Q have gained ground in this market.
As for the fortunes of timber in the kitchen market, in worktops it held a steady 3.5% of the business through the 2000s. However, says JKMR, more recently it has lost ground.
“Despite timber tops remaining a good seller for IKEA, volume share has dropped due to fashion, a perception they need more care, and the wider variety of other materials available,” says its report. “In 2021 share was 2.3%, and it’s projected to have fallen further in 2022.”
On a more positive note, however, analysts and commentators say that environmental concern generally and an increasing focus of consumers, specifiers and the wider business sector, including developers, on sustainability points the way to greater emphasis on circularity and use of nature-based materials in kitchen manufacture.
Mintel sees the trend illustrated by IKEA’s new ‘buy-back and resale scheme’.
“This allows consumers to exchange unwanted IKEA items for vouchers to spend in-store,” says the Mintel report “And John Lewis announced in 2021 a much broader strategy in this area, launching a Circular Future Fund to support product [circularity] innovation in various sectors, including household.”
Mintel adds that Nobia, owner of Magnet, announced in January 2022 that its Swedish Marbodal subsidiary was launching a sustainable concept, RE: NEW, focusing on updating kitchens without the need for a complete refit.
JKMR says that “eco/sustainable product specification may become a more fundamental expectation in kitchen buying, whether driven by legislation or client desire”.
“Recycled and up-cycled materials are a growing element of the furniture market, and sustainable materials such as bamboo are starting to enter the kitchen market in a more mainstream fashion,” says its kitchen report. “As product provenance in terms of cradle-to-grave carbon impact becomes of increasing concern to consumers, it is likely that the market will develop new materials created from recycled/ waste products. Either driven by consumer expectation or legislative obligation it may become incumbent upon kitchen suppliers to provide a means for the client to upcycle pre-existing kitchens, or, at least, to provide guidance or assistance on how to dispose of them more sustainably.”
JKMR says the concept of biophilia – “design of a building to enhance its environment” – is also increasingly influencing consumer choice. Construction, specification and manufacturing sectors are also increasingly looking to adhere to the ‘Well Standard’, explained by JKMR as “transforming the indoor environment by placing health and wellness at the centre of design and construction decisions”.
In terms of kitchens, says JKMR, one outcome of this direction of travel is application of innovative healthier ventilation and extraction systems and installation of “circadian rhythm lighting”.
“Within the holistic/WELL philosophy, the desire for inclusion of as much ‘greenery’ as possible indoors, both to ‘green’ the space and to absorb toxins, is also leading to the development of purpose-built cabinetry for hydroponic systems, and may also extend into development of ‘living’ worktops or ‘living’ walls within the kitchen for growing herbs and micro-plants,” states JKMR’s report.
Use of timber in living and work spaces is also seen as significantly enhancing their wellness performance and commentators see its use unadorned in interiors, and particularly kitchens, the hub of the home, increasing as a result.
Looking forward, JKMR says projections for the kitchen market in 2023 remain “extremely fluid, since expert views on economic outlook, interest rates, the housing market, and consumer confidence, show huge variation”. JKMR believes the “catch up” boom from Covid has now come to an end and “the artificial” boost which this gave the market in 2021/22 is not likely to be replicated.
“Although the housing market may remain fairly stable, with demand continuing to outstrip supply in much of the market, rising interest rates will most likely reduce budgets for major refurbishment amid some householders,” states its kitchen report.
Overall it predicts that the 2023 domestic kitchen market will see a 3.5% fall in installations. More positively, however, it predicts this volume contraction will not prevent a further rise in total market revenue at end client buying price.
In fact, it projects that fitted kitchen market value, including integrated MDAs, will increase 3.5% to exceed £5.4bn. This, it says, will be “partly due to manufacturing and logistic cost price rises being passed on, but also a tendency of householders wherever possible towards intrinsically higher cost product options even if this means utilising consumer credit”.
Mintel sees growth in installations of fitted kitchen furniture (ie minus MDAs) returning in 2025, with annual UK sales, which were £4bn in 2022, rising to £4.8bn in 2027.
