Top Takeaways:
- Product quality and availability head the list of consumer priorities
- Cost increases are a major concern, with price hikes of 13 percent in 2021 and an additional 13 percent expected for 2022
- Cabinets and faucets lead the list of most substituted products
- Positive shifts in material popularity include quartz countertops, frameless cabinet doors and showers with multiple showerheads
By Robert Isler
According to the new NKBA/John Burns Kitchen & Bath Market Index (KBMI) release, one of the numerous industry shifts seen within K&B is the decision by consumers to seek better quality products and materials, particularly because of the ever-closing price gap between higher and low end. In fact, the report identified product quality, along with availability, as the top consumer priorities. Backlogs that may now extend through the year, back-to-back years of double-digit price hikes and increasing sourcing challenges and solutions are among other notable shifts.
The top challenges are little changed, as supply chain disruptions continue to lead, scoring an 8.1 out of a possible 10 in severity. This is followed by the 7.8 score for cost of materials and 7.5 for availability of skilled labor. This continuing triple threat represents a lethal mix, but so far has not put a damper on our industry’s health. While members are dealing with supply issues by resorting to second and third options to maintain timelines, it is the pricing challenge that has garnered most of the recent attention. An average price increase of 13 percent was passed along to consumers in 2021, with the survey indicating that an additional 13 percent is in store for 2022 – at least that’s the maximum those in our industry say they are willing to pass along. Although postponements and/or cancellations among design firms have hovered in the mid-50’s percent range for the past three quarters, client frustration is growing. As one member noted “I have upwards of 25 products that have gone up in price since the beginning of December. I adjusted product costs accordingly and clients are not happy.” It’s a delicate balance to maintain margins. However, something has to give. As one respondent wondered “How high will prices go before customers can’t afford to make major improvements to their homes.”
We couldn’t complete 25 percent of the jobs in 2021 due to cabinet shortages.
Not that supply chain disruptions and sourcing issues are any less concerning. According to this latest study, nearly all respondents say they are being affected, with many claiming longer cycles are beginning to impact revenue generation, which will eventually trickle down to the bottom line. Cabinets are being substituted more than any other product, with 72 percent of industry professionals saying they are the most difficult to source. One respondent noted “Clients are picking out multiple options for cabinetry in the hopes that at least one will be available.” Another lamented “We couldn’t complete 25 percent of jobs in 2021 due to cabinet shortages.” Also consistently high on the list of product substitutions are faucets. As for other product sourcing challenges, refrigerators were mentioned by 64 percent of respondents.
Other changes covered in this report don’t involve market conditions but shifts in the popularity of materials across kitchens and bathrooms. Among the more notable ones on the upswing are quartz countertops, which 63 percent of respondents say have increased vs. just 3 percent who claim the opposite. Composite stone sinks, frameless (European style) cabinet doors, single-control bathroom sink faucets, showers with more than one showerhead and both quartz slab and tile shower walls have all gained considerably in popularity. On the flipside, only 8 percent of respondents feel that granite countertops have increased in popularity, vs. 55 percent who believe they have declined. Other notable decreases include cast-iron kitchen sinks, fiberglass, enamel steel and drop-in bathtubs/showers, and cultured marble shower walls.