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Market Overview

Demographics, Lifestyles, Optimism Result in Vibrant, Resilient Market

Housing's "perfect storm" may well be over, but the forecast for the kitchen and bath market remains far more favorable than for any other sector in residential construction.

Sure, the business climate is more challenging than during the housing industry's recent boom period. Sure, residential construction and remodeling activity have cooled considerably from their recent historic pace. Sure, the market remains mired in a steep – and, some say, predictable and healthy – "correction."

But despite all this, the kitchen and bath market remains fundamentally sound and poised for long-term growth.

Despite all this, the market remains remarkably resilient, supported by a potent combination of demographics, lifestyles and other factors.

And despite all this, the market remains a product of the same forces that fueled its impressive past growth: Near-record levels of homeownership; an aging housing stock; pentup demand, and a record number of two-income, baby-boom homeowners who continue to upgrade to reflect new design trends, changing family compositions, personal tastes and lifestyles.

Reinforcing this multi-tiered foundation is the heartfelt belief among Americans that their home remains the centerpiece of their life, and that kitchens and baths remain the heart of their home... stylish, functional spaces that attract the most attention, drive the most innovation and fuel the most excitement.

None of that will change in 2009.

Nor will the point of entry into this vibrant, exciting market.

Entry to the kitchen and bath market, in fact, will continue to be through a highly-specialized army of companies whose retail efforts are focused either primarily or exclusively on the design, sale and installation of kitchens and baths.

These professional dealers, designers and "whotailers" – KBDN's core circulation – carry an average of 12.2 kitchen product lines and 11.4 bathroom product lines ¹ and handle an average of 52 remodeled kitchens and 25 remodeled baths per year, at average installed prices of approximately $44,000 and $19,000, respectively, for an annual average sales volume that totals more than $2.5 million per company in kitchen and bath sales alone. ²

And while these prime specifiers acknowledge a troubled housing market, the vast majority is expressing optimism about business prospects over the next 12 months. Most remain bullish about their product-purchasing and showroom expansion plans, as well as their willingness to invest in their company's growth. Nearly 60% report they plan to add displays to their existing showrooms in the next 12 months. ² Nearly a third (31%) say they're planning a showroom expansion ², and nearly two-thirds (66%) report they plan to add or change an average of seven separate product lines during that same time span. ¹

And where will they get the information, insights and inspiration to do all that?

Well, 80% report that kitchen and bath industry publications are their top source for information about products, services and their market. ¹

The powerful combination of a vibrant industry and an audience of active, optimistic decision-makers should be sweet music to the ears of product marketers. It's music that's played to the cadence of a healthy, upbeat industry.

It's music whose rhythms and harmonies – even in the facing of a languid housing market – remain ripe with enormous opportunity.

Sources:
1 ‘How Products are Purchased' Survey, The Wayman Group, March 2008
2 KBDN Dealer Business Practices Survey, March 2008
3 Joint Center for Housing Studies, Harvard University; U.S. Census Bureau, August 2008