TTJ: HOW HAS THE KITCHEN SECTOR DEVELOPED IN RECENT YEARS?
Naked Kitchens owner Jamie Everett: It’s been very strong at the higher end. We’ve seen around 20% growth in numbers of kitchens, and stripping out inflation average value has risen over 20%. Lead times and guarantees of delivery days have been a consistent customer concern. We’re seeing financial stress in mid-market suppliers, with clients approaching us in near panic as their previous kitchen company has become insolvent or is unable to deliver. In addition, there’s a much more hands-on approach from clients, in particular from professionals, who want much more detail about what stock we hold to guarantee supply on time. We’re also finding clients delaying projects due to supply constraints from the rest of their build.
Stoneham Kitchens managing director Adrian Stoneham: During the pandemic we noticed an increase in activity on our website – we had more visitors searching and more leads and brochure requests. Our appointed retail centres experienced increased footfall and many exciting new projects were secured. While this has returned to a more normal level, demand for new kitchens is still just as positive and we’re getting a good number of enquiries and kitchen orders coming through. This, we’re finding, is due to homeowners continuing to improve properties rather than moving in the current climate with the increase in interest rates.
TTJ: HAS THERE BEEN INCREASED DEMAND FROM NEW BUILD AS WELL AS FROM HOUSEHOLDERS UPGRADING THEIR NEW OR EXISTING PROPERTY?
JE: Ninety-five per cent of our kitchens are renovations and/or extensions and improvements. The new build side of the market is still price obsessed, without properly accounting for delivery, quality, and added value. We’ve seen increased levels of interest because it’s finally dawning on developers that delivery is not a given with many suppliers, but not yet seen a particular increase in sales.
Ironically, the drive for value plays directly to our customer value proposition. On the one hand we’re seeing a decrease in clients who are stretching themselves to get a Naked Kitchen, but on the other we are seeing a huge increase in clients with almost unrestricted budgets interested in getting real value for money.
AS: So far kitchen demand is steady, and we are getting a good number of orders. 2023 will be a testing year because of the cost of living. But customers are preferring to spend money on home improvements rather than move so hopefully this will continue to be the case.
TTJ: WHAT HAVE BEEN KEY DESIGN AND COLOUR TRENDS RECENTLY?
JE: The move towards more and more natural materials on show continues unabated, along with brighter colours, and particularly colours found in nature – greens, light blues and pastel shades.
AS: Bold shades are particularly popular at the moment. Dark blue has been a top colour trend in kitchens for two years, however we are also seeing more demand for chic black as well as dark greens such as olive and bottle green. When it comes to design, ribbed wooden panelling is popular on doors, tall units and islands to create a distinctive visual contrast to room design. Hidden doors which lead to another room, have become desirable, as have ceiling high cabinets with bi-fold doors.
TTJ: HAVE KITCHEN SUPPLIERS HAD TO INCREASE PRICES DUE TO RISING COSTS?
JE: There have been significant retail-led price increases. We’ve passed on almost all these increased costs, which as a manufacturer make up a higher percentage of our turnover than our retail friends – and our electricity bill went from £180,000 a year to £800,000 in two years. Maintaining margin has been critical. But 90% of clients are completely fine with the increases.
AS: Due to price increases across the kitchen market we’ve had to increase the costs of our kitchens. However the good news is that solid timber prices – particularly species sourced from North America – are reducing in price as container transportation cost and price inflation have fallen away.
TTJ: WHAT HAVE BEEN TRENDS IN TIMBER USE ?
JE: In the past oak has been the dominant species by far, but we’re seeing a lot of interest in maple instead. And in 2022 we sold double the walnut we did in 2021.
AS: We’re designing a wide variety of kitchens at the moment, including wooden kitchens contrasted with painted cabinets. For these oak and walnut have been the preferred timbers. Grained timbers with painted finishes are very much in vogue and the perfect substrates for this are white oak or ash.
TTJ: DO EXOTIC/TROPICAL TIMBER SPECIES FEATURE IN YOUR KITCHEN DESIGNS?
JE: No. We’re very wary of tropical species simply because establishing veracity of sustainability claims is pretty difficult and due to the amount of fraud in the chain of custody pipeline. We just feel it’s better to stay away.
AS: Stoneham includes accents and trim details in macassar, zebrano, pippy oak and birds eye maple. Satin walnut, with its dramatic heartwood and sapwood contrasts also add allure to many designs.
TTJ: DO CUSTOMERS ASK ABOUT SUSTAINABLE SOURCING OF TIMBER?
JE: We tend not to be asked as it’s a given that the solid materials we work with, in particular American and European hardwoods, are from sustainable sources.
AS: Our customers are interested in sustainability, and we refer to FSC and PEFC-certified products sourced, including solid timber, veneer, MFC and MDF. The information is also on our website and we provide it regardless when meeting with potential customers.
TTJ: ARE THERE SIGNS OF INCREASED ENVIRONMENTAL AWARENESS AMONG CUSTOMERS AND A PREFERENCE FOR NATURAL MATERIALS?
JE: It’s not so much the environment at large driving clients towards natural materials, but growing understanding of their own immediate environment and wanting that to reflect the natural world. AS: We’re certainly seeing more customers wanting ethically sourced, greener products. Buying British has this appeal. Customers are also pleased to know they’re contributing towards a reduction in carbon footprint. Some do prefer natural wood throughout while others prefer to pair wood with other materials. We are also keen to emphasise that the build quality and longevity of our products makes them more sustainable.
TTJ: KITCHEN MANUFACTURERS HAVE REPORTED THAT DESIGNS/ SPECIFICATION HAVE REFLECTED CUSTOMERS USING THE HOME AS A WORK SPACE. IS THIS CONTINUING?
JE: It’s less to do with work from home and more to do with changing their actual lifestyle – they want to engage more in cooking, food choice and preparation – we knew the kitchen was the beating heart of the home but overlooked it. Now there’s proper recognition it has to be done right. AS: The kitchen has certainly evolved since the pandemic to incorporate office space. We get asked for features such as pullout and lock-out work surfaces with cable management within the kitchen, pop-up sockets and charging drawers, boiling water taps and cushioned booths, which provide a more comfortable working space.
TTJ: DO YOU HAVE ISSUES WITH TIMBER PRICING AND SUPPLY?
JE: Before we started making kitchens, I was a bond trader, which meant I took special interest in cycles. So for us, we could to some extent read the tea leaves in terms of the Covid oversupply, followed by the demand side explosion coupled with supply side fracture. But, nonetheless, we still underestimated the level of volatility. Unless there are some timber traders out there with a crystal ball, I don’t think there was much anyone could have done to smooth this out. For any stock holders the last two years have been a delight – this year we can see an oversupply scenario, so it may not be so easy.
TTJ: WHAT IS YOUR OUTLOOK FOR THE MARKET THROUGH 2023?
JE: It’s been an interesting start to 2023. We see client-side stress, particularly at the lower end and there’s definitely stress for resellers, with insolvencies gathering pace, particularly in the middle ground. Even at the high end, we’re seeing more sale activity and ‘sale extended’ offers. We think this stems from lack of willingness for clients to commit, either due to lack of confidence or inability to get building work finished or to budget. Kitchen sellers fighting each other to take revenue at the expense of margin, will play out towards the year end when they run out of liquidity. With current interest rates, banks are increasingly happy to cut their losses while there are still assets enough to cover debentures and charges. Big players will ride it out and fight it out with continual sales and phoney offers, but mid-size operations, with questionable margins, will definitely be squeezed. Despite our like-for-like monthly sales being up over 25% this year, I can see it turning quite hard out there.
AS: With the price pressures, 2023 is going to be a testing time for the kitchen market and other industries. We’ve already witnessed some non-British kitchen brands closing their doors. However, we feel customers are more likely to choose British brands in support of local companies. The cost of living will certainly influence purchasing decisions, although we anticipate that moving home may be less desirable due to high interest rates, so homeowners may spend money on renovation projects, such as a new kitchen.
