Q4 KBMI: Project Size Increases, Foot Traffic Still Up but Slowing
The 4th quarter Index revealed some opportunities for and challenges ahead.
By Robert Isler
Although the Design and Retail Sales sectors continue to move forward, each is evolving differently. The challenges though, are strikingly similar. This was the general takeaway for these segments based on the Q4 2020 NKBA/John Burns Kitchen & Bath Market Index (KBMI).
Half the design firms report that demand for bids/proposals for future remodeling is higher, with homeowners still somewhat confined to their homes due to COVID-19. This is below the 57% who offered that response in the Q3 survey.
More than a third (35%) did not have a single project postponed or cancelled in Q4, while another 38% had some postponements, but no outright cancellations. Even those postponements had a bright side, as over half the designers said they expected those projects to resume sometime in the first half of this year. Open-ended comments were positive as well. For instance, one designer noted, “We have an influx of clients reaching out who are ready to remodel after spending months in their homes.”
Others noted that the size of projects was beginning to increase. “We are seeing more requests for larger projects. Only those committed to paying designers are reaching out.” As to the type of designs desired, two comments sum it up. One designer stated “My clients need functional changes. They need the home to accommodate an adjusted lifestyle.” Another spoke of the need for spaces to be more aesthetically pleasing because of the additional time spent at home.
“We are seeing more requests for larger projects. Only those committed to paying designers are reaching out.”
As for Retail Sales, foot traffic continues to show strong improvements over the first half of 2020, with 35% noting it was up. However, the same question asked in Q3 yielded 66% of respondents saying traffic had increased. Specific statements from retailers suggested a trend toward lower-priced products, which seems somewhat contradictory to observations from designers. For instance, one retailer said, “We are receiving more requests for mid-level products vs. the upscale products we typically carry. People want less expensive products.”
Another referenced a different issue, noting that with more clients working from home, the expectation is for projects to be “completed in a reasonable amount of time to minimize disruptions.” Still others spoke of concerns about price increases for raw materials, and the challenge of whether to charge clients more or accept lower margins.
For both segments, supply-chain disruptions continue to be the top challenge, with cost increases from suppliers and labor disruptions next on the list. Designers said the cost and labor issues saw an uptick since Q3.