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Kitchens and Kitchen Furniture - UK - October 2018

OVERVIEW
What you need to know
Products covered in this report
EXECUTIVE SUMMARY 
Spending on kitchens up 5% in 2017
Figure 1: Consumer spending on kitchens, 2013-23
Cabinets account for 57% of spending
Figure 2: Market for kitchens, by segment, 2017 (est)
Demand for kitchens is influenced by the housing market
Figure 3: Housing transactions, UK, 2013-18 (est)
Companies and brands
B&Q is the market leading DIY chain
Figure 4: Distribution of consumer spend on kitchens, by value, 2018 (est)
DIY specialist chains have seen dramatic changes
IKEA determined to build market share in the UK
Most specialist chains showing good growth
Retailers adapting to changing shopping patterns
Building presence in smart kitchens
Augmented reality will enhance customer experience
IKEA presents a very low-priced kitchen
The consumer
20% live in homes with a utility room
Figure 5: Kitchens and utility rooms in UK homes, July 2018
ABs most likely to have built-in appliances
Figure 6: Built-in or free-standing appliances in itchens, July 2018
Half have eating areas in the kitchen
Figure 7: Layout of kitchens and dining areas, July 2018
20% have revamped kitchens in the last three years
Figure 8: Kitchen repairs and refurbishment in the last three years, July 2018
More than a quarter of kitchen refits cost over £4,000
Figure 9: What they spent on kitchens, July 2018
Kitchen refits are comprehensive
Figure 10: Details of kitchen or utility room refits, July 2018
Bringing things up-to-date
Bigger kitchens drive demand
Figure 11: Reasons for refitting kitchens, July 2018
22% spent most at B&Q
Figure 12: Retailers used for kitchen or utility rooms, July 2018
Retailers must offer quality and choice
Figure 13: Factors influencing choice of retailer for kitchens, July 2018
Showrooms best for getting ideas
Figure 14: Customer preferences when shopping for kitchens, ideas, July 2018
The personal touch is best for advice
Figure 15: Customer preferences when shopping for kitchens, advice, July 2018
People prefer to judge quality in a store
Figure 16: Customer preferences when shopping for kitchens, judge quality, July 2018
Kitchen designers preferred for planning
Figure 17: Customer preferences when shopping for kitchens, prepare plans, July 2018
What we think
ISSUES AND INSIGHTS 
Which retailers will benefit from disruption to Homebase?
The facts
The implications
Is B&Q right to get out of fitting services?
The facts
The implications
Will internet retailing sound the death-knell for kitchen showrooms?
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Market up 5% in 2017 but growth is slowing in 2018
Cabinets account for 57% of spending
Demand for kitchens is influenced by the housing market
Variety of influences shaping demand for kitchens
Wide range of retailers serve the kitchen market
Online market share reaches 9% by value
MARKET SIZE AND FORECAST
Market remained relatively strong in 2017
Figure 18: Consumer spending on kitchens, 2013-23
Figure 19: Consumer spending on kitchens, 2013-23
Forecast methodology
MARKET SEGMENTATION
Grey remains popular and people are mixing colours
Surface textures add warmth and variety
Cabinets make up over half of kitchen spend
Worktops benefit from premium demand
Figure 20: Market for kitchens, by segment, 2017 (est)
Creating a place where people gather
Rise of the smart home
Reluctance to build in electronic gadgets
Trading up to a boiling water tap
Innovative storage
MARKET DRIVERS
4.6% more households by 2022
Figure 21: UK households, by size, 2012-22
Housing sales stimulate kitchen revamps
Figure 22: Housing transactions, UK, 2013-18 (est)
Is ‘improve not move’ fact or fiction?
Generation Rent unlikely to engage with refurbishment
Figure 23: Household tenure, by age, 2018
Consumer confidence remains strong
Figure 24: How consumers describe their financial situation, June 2014-18
86% of households regularly cook
Figure 25: Type of evening meal cooked/prepared most often in household, May 2018
Smart home still in its infancy
Figure 26: Ownership of connected home products, April 2018
CHANNELS TO MARKET
B&Q is the market leading DIY chain
Figure 27: Distribution of consumer spend on kitchens, by value, 2018 (est)
DIY chains losing share
Specialist chains dominated by Wren and Magnet
Catering for kitchen fitters
Higher-end retailers performing well
The shopping journey includes internet browsing
Online market share reaches 9% by value
Huge array of kitchens online
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Wren trebles turnover in five years
DIY specialists have enjoyed mixed fortunes
IKEA determined to build market share in the UK
Growth of premium specialists
Kingfisher streamlining the supply chain
B&Q and Wickes recruiting more designers
Magnet benefited from price drops
Wren differentiates and brands its service
IKEA opening inner city store
Magnet works with Samsung to develop a Smart Kitchen
COMPANIES AND BRANDS – RETAILERS
Leading kitchen retailers
Wren’s rapid growth
The DIY specialists have enjoyed mixed fortunes
Homebase undergoing turnaround
IKEA determined to build market share in the UK
Turnover performance of the leading retailers
Wickes weaker in 2018
Figure 28: Leading kitchen retailers, total company turnover, (Excluding VAT), 2013-17
Operating profit of the leading retailers
Figure 29: Leading kitchen retailers, operating profit, 2013-17
Operating margin of the leading retailers
Figure 30: Leading kitchen retailers, operating margin, 2013-17
Fewer DIY sheds
Figure 31: Leading kitchen retailers, stores, 2013-17
Wren productivity boosted by larger showrooms and broader ranges
Figure 32: Leading kitchen retailers, turnover per store, 2013-17
Smaller kitchen retailers
Figure 33: Selected kitchen specialists, turnover (excluding VAT), 2013-17
Commercialising bespoke kitchens
Luxury kitchen businesses
Neptune has expanded into Europe and Asia
Canburg serves the contract and retail markets
Volatile profits
Figure 34: selected kitchen specialists, operating profit, 2013-17
Wide variation in profitability
Figure 35: Selected kitchen specialists, operating margin, 2013-17
Harvey Jones sees cautious growth
Figure 36: Selected kitchen specialists, stores, 2013-17
Figure 37: Selected kitchen specialists, turnover per store, 2013-17
COMPANIES AND BRANDS – SUPPLIERS
Figure 38: Suppliers of kitchen furniture, turnover, 2013-17
COMPETITIVE STRATEGIES
Kingfisher streamlining the supply chain
B&Q and Wickes recruiting more designers
Fitting services axed at B&Q and Homebase
Magnet benefited from price drops
Wren stresses that it is “different”
IKEA has tiered pricing structure
LAUNCH ACTIVITY AND INNOVATION
IKEA opening on Tottenham Court Road
Magnet builds presence in smart kitchens
The end of kitchens as we know them?
IKEA presents a very low-priced kitchen
Figure 39: IKEA, Kitchenette, 2018
Augmented reality will continue to develop
ADVERTISING AND MARKETING ACTIVITY
Sector advertising spending up 12% in 2017
Figure 40: Total above-the-line, online display and direct mail advertising expenditure on kitchens, 2014-17
Wren Kitchens accounts for 21% of estimated advertising spend
Figure 41: Top 10 advertisers, kitchens, 2017
Wren Kitchens boosts spending to become largest advertiser
Wickes cuts spend but remains in the top three
B&Q’s advert emphasises its human touch
All change at Homebase
Smaller advertisers
Figure 42: Top 10 advertisers, kitchens, 2014-17
Television advertising some half of media spend
Figure 43: Advertising, kitchens, by media, 2017
Extended sales and discounts ruled to mislead shoppers
Figure 44: Wickes kitchen advert, 2017
Nielsen Ad Intel coverage
THE CONSUMER – WHAT YOU NEED TO KNOW
30% of ABs have a utility room
23% of homes have all fitted appliances, 33% have a mix of built-in and free-standing
34% of kitchens has a seated eating area
1.9 million kitchens revamped each year
Most activity 3-5 years after a house move
A quarter spend some £4,000 refitting the kitchen
Improved functionality
61% wanted to update the style
22% spent most at B&Q
Buying kitchens online
Retailers must offer quality
Showrooms matter, but attitudes are changing
The personal touch is best for advice
KITCHENS AND UTILITY ROOMS IN UK HOMES
20% live in homes with a utility room
Figure 45: Kitchens and utility rooms in UK homes, July 2018
BUILT-IN OR FREE-STANDING APPLIANCES IN KITCHENS
ABs most likely to have built-in appliances
Figure 46: Built-in or f-standing appliances in itchens, July 2018
LAYOUT OF KITCHENS AND DINING AREAS
Half have eating areas in the kitchen
Eating in the kitchen
Private renters most likely to have shared living rooms and kitchens
Is the dining room outdated?
Just a kitchen
Reducing odours
Figure 47: Layout of kitchens and dining areas, July 2018
KITCHEN REPAIRS AND REFURBISHMENT
20% have revamped kitchens in the last three years
Most activity 3-5 years after a house move
A family affair
Figure 48: Kitchen repairs and refurbishment in the last three years, July 2018
Approximate spend
Figure 49: What they spent on kitchens, July 2018
DETAILS OF KITCHEN OR UTILITY ROOM REFITS
Kitchen refits are comprehensive
Feature items
Improved functionality
Just a little more
Extending the kitchen
Figure 50: Details of kitchen or utility room refits, July 2018
REASONS FOR KITCHEN REFITS
Bringing things up to date
Better layout inspires 43%
Bigger kitchens please
Kitchens as an investment
Getting the built-in look
Figure 51: Reasons for refitting kitchens, July 2018
RETAILERS USED FOR KITCHEN OR UTILITY ROOMS
22% spent most at B&Q
Buying kitchens online
Figure 52: Retailers used for kitchen or utility rooms, July 2018
FACTORS INFLUENCING CHOICE OF RETAILER FOR KITCHENS
Retailers must offer quality
Choice encourages shoppers
Savvy shopping is highly important
Designers are a key factor
Fitting services matter
Websites or showrooms?
The influence of the builder
Design it yourself
Figure 53: Factors influencing choice of retailer for kitchens, July 2018
FACTORS WHICH WOULD INFLUENCE CHOICE OF RETAILER FOR KITCHENS, NON-BUYERS
Demanding shoppers
Owner-occupiers are key target customers
Figure 54: Factors which would influence choice of retailer for kitchens, non-buyers, July 2018
CUSTOMER PREFERENCES WHEN SHOPPING FOR KITCHENS
Showrooms best for getting ideas
Figure 55: Customer preferences when shopping for kitchens, ideas, July 2018
The personal touch is best for advice
Figure 56: Customer preferences when shopping for kitchens, advice, July 2018
People prefer to judge quality in a store
Figure 57: Customer preferences when shopping for kitchens, judge quality, July 2018
Kitchen designers preferred for planning
Figure 58: Customer preferences when shopping for kitchens, prepare plans, July 2018
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – MARKET SIZE AND FORECAST
Forecast methodology

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