Lakes Comment: Q1 2022

This year has got off to a stuttering start in Q1 as rising inflation, the Russia-Ukraine conflict and labour shortages contribute to new challenges for the KBB industry to negotiate.

Inflation is a major worry for KBB suppliers. Over the coming months, we expect consumers to be more cautious and selective in their spending and focusing on the essentials, particularly among younger homeowners (under 50s), those whose outgoings are rising faster than their incomes, and households on lower earnings.

While the cost of living stays high, we expect KBB buyers to focus on products which save money in the longer term. For example, showers that use half the water, require half the heating, so where homeowners are investing, showers may become even more popular than baths.

The outbreak of war in Ukraine has also undermined consumer confidence (according to GfK) which will hit demand for bigger RMI projects, such as a new bathroom.

The war has not had a direct impact on the supply of showering spaces or bathroom products, but the ensuing energy crisis has. China opened more mines to increase the nation’s energy output from coal, and rationed energy usage in the short term by shutting power supplies to factories on certain days of the week. This knocked the supply of a wide range of products including bathroom components, hardware (handles, hinges, locks etc) and aluminium profiles.

Supplies are also being hindered by lags in international freight, coupled with congestion and covid restrictions in large ports like Shanghai. You may have seen posts on LinkedIn showing the approaches to Shanghai port chock-a-block with vessels trying to get in and out.

At the very end of Q1, BiKBBI reported a positive uptake on its new apprentice programme. This is encouraging as the UK skills shortage is a growing problem which needs addressing now and in the longer term. Unless the industry’s ageing workforce is replaced and fresh talent brought in to fill the places of European workers who left following Brexit and Covid, meeting demand for bathroom installations in reasonable timeframes will be impossible.

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