Kink in the chain – design news for the kitchen and bathroom

Global supply chain disruptions, driven largely by the ongoing impact of COVID-19 and resilient demand, continue to be a major industry-wide challenge. Delivery times for both domestic and international products and materials are reportedly stretching for weeks if not months, while kitchen and bathroom designers are being forced to employ a range of tactics to mitigate the impact of delivery delays and inflationary pricing pressures and consumer insecurity.

These are the key findings of a nationwide survey Kitchen and bathroom design news in collaboration with its exclusive research partner, the Research Institute for Kitchen Intelligence (RICKI). The online survey, conducted in early 2022, included more than 350 kitchen/bathroom retailers, designers, remodelers and other planners in markets across the US

KBDNThe survey results, which mirror those from trade organizations like the National Kitchen & Bath Association and the National Association of Home Builders, found that record high levels of product backlogs, a challenge for almost two years, remain a nuisance even after the pandemic has abated – extending the time before work on kitchen/bathroom remodeling can begin, while simultaneously increasing project costs, shrinking profit margins, lengthening construction cycles and leading nervous clients to temporarily postpone or even cancel remodeling commitments until market conditions settle.

Equally evident is the widespread belief that the global logistics problems, the shortage of skilled workers and the price pressure will not be resolved in the foreseeable future – and could even worsen in the coming months.

SURVEY RESULTS

Almost every kitchen and bathroom designer (97%) was surveyed by KBDN reported some disruption to the product supply chain, with nearly nine in ten (86%) reporting “moderate” to “major” disruptions, although business remains generally positive and expectations remain high. In contrast, only 11% of respondents reported delays as “minor” and even fewer (3%) reported no disruption at all (see Figure 1).

Almost half of respondents (49%) say that product/material delivery delays most commonly last three to six months, with the majority (43%) of delays lasting three months. In comparison, about 29% of retailers and designers surveyed report delivery delays averaging about two months, while almost four in ten report product delays of more than six months and only 8% say delays last less than a month (see Figure 2).



About half of the kitchen and bathroom professionals surveyed say they expect supply chain disruptions to continue at the same rate as they do now. One in four believe supply chain problems will improve, while one in five expect conditions to get worse.

Large household appliances — particularly refrigerators and cooking appliances — along with furniture, were the product categories hardest hit by supply chain issues, twice as many as any other kitchen and bathroom product category, design experts surveyed report.

Plumbing fixtures and fittings, cabinet fittings, flooring and countertop materials such as granite and ceramic tiles were affected, among other products. KBDN Survey takers say (see Figure 3).



Similarly, when it comes to raw materials, 67% of respondents report that wood is the most affected by supply chain issues, twice as many as other materials such as steel, aluminum, plastics, foam, plaster, stone and concrete, and copper.

DIFFERENT CHALLENGES

But supply chain issues have caused more than delays in product and material deliveries, kitchen and bathroom designer experts say KBDN.

For example, nearly three in four (73%) of respondents say supply chain issues have led to “large” price increases for products, while another 24% say price increases, while noticeable, were “small.” In contrast, only 1% of survey respondents say they have not experienced any noticeable product price increases due to the delays (see Figure 4).



Delivery delays had an equally strong impact on profit margins. For example, more than half (52%) of kitchen and bath professionals surveyed report that product/material price increases, while generally passed on to customers, have reduced their profit margins. In contrast, only 17% of respondents say they have experienced either a significant or a small positive increase in margins.

Finally, more than half (55%) of current kitchen and bathroom customers are postponing or canceling projects due to delivery delays or price increases, according to surveyed design professionals. The reasons for the postponements or cancellations, the survey participants report, are about equally related to price increases or delays in delivery (see Figure 5). ▪



Design professionals employ a number of tactics to mitigate glitches

CHICAGO — Initially baffled by continued disruptions in the supply of products and raw materials, kitchen and bathroom design experts say they’ve implemented a number of sensible tactics to mitigate the impact of product shortages, extended construction schedules and nervous customers.

According to a nationwide survey by KBDN Working with its exclusive research partner RICKI, industry professionals are increasingly developing relationships with lesser-known brands and local suppliers, often identifying brands they had never previously considered and directing customers to alternative products that are available to fit timeframes and budgets fulfill.

More than six in 10 design professionals surveyed say they have switched at least some suppliers due to disruptions in the supply chain. Others find that they have changed their planning, ordering, and scheduling processes. Still others are reportedly stocking warehouses with inventory, buying in bulk whenever possible, checking product availability during development, adding extra lead time to projects, and focusing on fewer product lines to streamline production.

Communication is also more important than ever as all parties involved in the project are up to date on the severity of the supply chain disruptions and set realistic expectations.

These results are confirmed by other surveys.

According to the National Kitchen & Bath Association, members are increasingly turning to U.S.-based suppliers, as well as local furniture stores and skilled local craftsmen, rather than relying solely on big international brands, although some smaller foreign suppliers – particularly high-profile – niche brands with warehousing and Distribution in the USA – often have enough available inventory to meet a demand in a timely manner.

Protracted delays in appliances have prompted many designers to specify and order products well before design plans are finalized, according to the NKBA, which noted that in some cases, remodeling customers don’t throw away old appliances or use temporary appliances until new ones will be delivered.

“We try to get customers to buy long-lead items as soon as the contract is signed,” said one designer KBDN. “We’ve also changed our business model and order products before the designs are even finished. Additionally, we keep variable costs open to avoid incurring increased product costs, and we warn our customers upfront to expect delays.”

“Our strategy now is: plan, plan and plan,” said another designer. “We are also taking more time to define the budget and work on the schedule, so we can order products earlier and start construction later, which increases the waiting time between signing the contract and starting construction. In addition, we order and stock materials once a project is committed.”

Other comments from retailers/designers were as follows:

  • “I found new suppliers and added product lines to reduce delivery times. Our company has reached out to other companies to explore ways to receive products sooner. We are also being realistic with our customers about the delays we have experienced.”
  • “Completing jobs as quickly as possible after decisions are made, ordering and receiving product before construction begins, and managing customer expectations with complete transparency have been key factors for us.”
  • “We have tried to source locally made products and stocked items and we are in constant contact with suppliers to see what is readily available so we have ‘real’ data on delivery times. We also try to find out in advance which products are immediately available and direct customers to those items.”
  • “Homeowners have to be prepared for longer waiting times and higher prices. Above all, they must remain flexible, because almost every single phase of the supply chain has been affected by COVID-19 somewhere along the way.” ▪

Industry described as “fast and upbeat” despite supply chain and other challenges

HACKETTSOWN, NJ — The kitchen and bath industry ended 2021 on a positive note, remaining “agile, creative and upbeat” amid ongoing supply chain disruptions, double-digit price increases and other challenges, the National Kitchen & Bath Association reported last month.

The NKBA provided its comments in connection with the release of its final 2021 “Kitchen & Bath Market Index”.

“We are very encouraged by the latest KBMI results as they confirm that the industry remains optimistic about the future, while remaining flexible and creative to thrive in the face of ongoing challenges,” said Bill Darcy, Chief Executive Officer of the NKBA in Hackettstown, NJ.

“While we keep a close eye on things like ongoing supply chain issues and inflation, fundamentals for the industry remain strong, including continued consumer demand with strong home values ​​and stock levels,” noted Darcy.

According to the NKBA, the home remodeling industry has been “the beneficiary of a seller’s home market, with homeowners using the market value of their home to renovate spaces in their home to increase value as well as livability and flexibility.”

In the fourth quarter of 2021, all kitchen and bathroom segments saw double-digit year-on-year sales growth and solid quarter-on-quarter performance with an 8.1% increase in total spend, the NKBA reported. While challenges remain, “some of these may help the industry achieve long-term growth by spreading projects through 2022,” the association added, noting that industry experts surveyed predicted annual growth of 13.1% for that year. forecast, even in the face of supply chain disruptions, skills shortages and inflation.

“Virtually every sector of the economy is being impacted by the ongoing supply chain, materials and labor issues, and the kitchen and bathroom industry is no exception,” Darcy said. “However, the kitchen and bath industry remains resilient in the face of this adversity and is preparing for another year of growth,” he added. ▪

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