The latest NKBA member survey projects full-year K&B sales for 2020 will exceed 2019 volume, although challenges remain.
By Robert Isler
If full-year sales forecasts from the NKBA/John Burns Kitchen & Bath Market Index (KBMI) Q3 survey prove accurate, the industry may have turned a corner. More than 500 NKBA members participated in the recently released study. Based on their feedback, NKBA projects that overall industry sales for 2020 will increase by 1.1% over 2019. That might not sound like much, but it’s a welcome improvement over the 4.4 annual loss expected when the same question was asked in Q2. And, it’s far, far better than the Q1 prediction of a nearly 14% year-over-year loss when the pandemic first reared its ugly head.
Drilling down by segment, there is a strong dichotomy. Manufacturing is expected to exceed 2019 by 5.9%, while Retail Sales is predicted to grow by 4.3%. The other two groups, however, still anticipate that full-year sales will trail those of last year. Building & Construction is calling for a 2.6% loss and Design sees a loss of 2.3%. Although those shortfalls are similar, the numbers are deceptive. During the Q2 survey, Designers had been expecting a full-year loss of nearly 9%, so the 2.3% projected drop is a strong improvement. The anticipated 2.6% shortfall for Building & Construction, on the other hand, is actually slightly higher than the previous 2.4%.
Actual sales growth for Q3 over Q2 is likely the reason for optimism among most respondents. Overall, industry sales were up a respectable 5.9%. This was led by Manufacturing (+9.6%), followed by Building & Construction (+7.9%) and Retail Sales (+7.5%). Design lagged, but was still up by 3.2%.
Despite actual and anticipated sales gains, challenges and concerns have not vanished. Supply-chain disruptions top the list of most dire concerns for the first time. On a scale of 1 to 10, with 10 being the most significant concern, it received a rating of 7.2, edging out economic uncertainty. Members shared specific frustrations regarding appliance and cabinetry deliveries, which yielded some of the worst delays.
“Appliance lead times have doubled. Some models you can’t even get anymore,” said one member.
“First we saw appliance lead times extend to several weeks. Now we’re seeing delays of 90 to 120 days,” said another.
“Stock is so low at many retailers that we are forced to send clients to shop at big-box stores for their appliances,” noted a third.
Several remarked that although lead-time delays are an issue across all products, appliances have been hardest hit.
Comments regarding cabinet delays echoed similar themes. One respondent noted “Many cabinet companies have tripled their lead times and the quality is declining as well.”
Still others attributed the widespread supply-chain disruptions in cabinets to suppliers being slowed by sick workers, and that government shutdowns in some states impacted cabinet manufacturing plants as cabinetry was not considered essential.
