Landmark growth for Kbsa

Kbsa reports "unheard of" retail membership growth and offers its forecast for kitchen retail in a challenging market

19 Nov, 18

At its recent AGM, the Kbsa reported “unheard of” retail membership growth and offered its forecast for kitchen retail in a challenging market.

Celebrating its 40th year, the Kbsa held its AGM at the Stratford Manor Hotel in Warwickshire.

Around 115 members – 55 of whom were retailers – attended the event, which included an evening presentation of the Kbsa Designer Awards across nine categories.

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Landmark growth for Kbsa

Chair of the Kbsa Richard Hibbert opened the proceedings and explained “it’s still a challenging time” for its retail members, but highlighted “in an uncertain market, the good rise to the top.”

He exclaimed a focus for the association was to grow its retail membership, and the Kbsa has appointed national account manager Allister Reed, along with agent Eddie Otto, to build on its numbers.

He reported the association had already grown by 20 members over the last couple of months, “which is probably unheard of for the Kbsa,” and said the organisation had a target of 150 decision makers for this year and is “due to break that barrier.”

Hibbert exclaimed: “Personally, I would like to see that rise to 250-300, which is a real possibility considering what we have been doing over the past couple of months.”

As part of this drive, Allister Reed said he would be building closer relationships with existing members and promoting the Foundation membership.

Created for businesses who have been trading from between six months to two years, the Foundation membership allows independent firms to initially join the association without becoming a full Kbsa member.

Economic landscape

Taking a view of the whole kitchen market, acting CEO of the Kbsa Uwe Hanneck reported on the changing market that retailers were now having to work in.

Although he stated: “I believe it’s rather difficult to make a prediction about the political outlook for the near future, and even less so for the medium to long-term.”

He exclaimed Brexit was one of the biggest challenges in British history, with major political parties in turmoil and said it would “continue to overshadow our day-to-day lives for years to come.”

And while Hanneck said he personally didn’t believe there would be a No Deal scenario, he suggested retailers ought to insist their suppliers – foreign or domestic – keep them well informed about their individual strategy in case there is a hard Brexit.

Hanneck reported GDP was likely to remain subdued at 1.4%, with the Bank of England expected to maintain the current interest rate.

But he also reported some good news; the UK economy has grown at its fastest rate for nearly a year.

This is in addition to a growth in wages, a low unemployment rate, and a boost in UK exports due to the low value of the Sterling.

Hanneck also stated that, although construction had fallen, the long-term demand for housing remains strong.

He continued to take an in-depth look at the kitchen market, stating there may be an impact on levels of new installations but it will be relatively small.

Hanneck stated the value of kitchen sales will continue to grow, driven by price increases and consumers spending on higher cost products; and it will also be driven by RMI.

In addition, he reported the luxury end in UK sales has grown from less than 4% to nearly 7%.

This is not only backed by upper-end developments but affluent over 50s, both of which favour the independent sector.

Overall, the kitchen market in 2017 increased by almost 3% to achieve over £1.2million in sales, representing a retail value of £4.2billion.

At the volume end of the market, Hanneck stated there would be continued domination by Howdens and Travis Perkins, which includes Wickes, with “substantial” growth from the likes of Ikea and Wren, following the demise of Homebase.

Hanneck said: “We have to accept we operate in a relatively small segment of the overall market. Over 80% of the kitchen furniture market is dominated by a few, large players.

“But we operate in a segment that cannot and will not be covered by the mass market retailers. And that, in itself, will give us a high degree of protection in uncertain times.”

He concluded the Kbsa had refocused and was not just about ensuring the consumer feels safe buying from independent businesses.

He said: “It’s about ensuring the kitchen specialist has a proper future.”

At the event, the Kbsa announced the winners of its Designer Awards, presented by head judge Wayne Hemingway.