The commercial director of Swift Electrical, Malcolm Scott, looks at how the kitchen industry has changed over the years, and is still evolving
Almost every part of the kitchen industry has seen massive change in the past few years as businesses of all kinds – manufacturers, retailers and distributors – have evolved to meet the needs of a changing consumer world or have ceased to exist as it leaves them behind.
Many high-street names have gone. There were 111 branches of MFI operating until 2008 taking over 10% of the fitted kitchen market. There were 160 Moben and Sharps showrooms in the Home Form Group until 2011, selling around 3,000 kitchens a year.
During 2007 we also saw the demise of Focus Group, trading as Focus DIY, Payless DIY and Do It All – the UK’s second-largest DIY chain with 170 stores. The last 33 Habitat stores closed during 2011, along with 60 stores of Walmsley Furniture. In the domestic appliance sector, 236 Comet stores closed in 2012. Miller Brothers, Bennetts of Norwich, Apollo 2000 and Best Buy all disappeared from the high street – taking a further 40 shops from the high street.
Independent kitchen specialist retailers have survived the recession quite well, but there have been big structural changes with a move away from standalone independent businesses towards manufacturer-owned outlets and franchise outlets.
There has been a clear increase in the number of retailers operating under franchise umbrellas, such as Dream Doors, Schmidt, Clive Christians, in-toto and Granite Transformations – and in the number of manufacturers, like Nobilia and Mobalpa, who now operate some wholly-owned retail showrooms.
As the decade has unfolded, traditional independent traders who have retired have more often been replaced by people entering the kitchen industry for the first time via the franchise option. Companies like Schmidt will finance up to 30% of the cost of a new showroom start-up and will give detailed training and guidance, as well as providing a full set of products for a new retail venture to sell.
Worldwide, Schmidt has 700+ outlets in 25 countries, including eight quite new stores in London with three more in south-east England and plans to develop a network of more than 100 showrooms in the UK.
Dream Doors has over 60 franchise outlets in the UK and offers an ‘off-the-shelf’ trading proposition for any investor willing to commit £75,000. Granite Transformations has 200+ outlets worldwide and 40 in the UK. Again, this franchise operation offers new retailers a stream of sales leads and a package of full trading support for a marketing fee of 2% of turnover and an operating fee of between 2% and 8% of door and granite sales.
Mobalpa has opened five franchise outlets in London in the past 18 months and plans more. For a £50,000 investment, it offers new retailers a full trading package. Nobilia, the huge German furniture manufacturer, has moved into the kitchen specialist sector, operating as Kutchenhaus. It has three directly operated showrooms and three franchise outlets with plans for many more.
Wellmann Alno, the huge German furniture manufacturer with a long history of franchise trading, continues to operate the in-toto kitchens network. This has 48 existing stores and will provide a full training and trading package suitable for persons with little or no previous industry experience for an investment of £130,000.
Regional furniture manufacturers have continued to open their own showrooms, with the Neville Johnson Group now having nine directly-owned Tom Howley showrooms, and the Sigma 3 Group having eight.
The kitchen industry landscape is changing with groups like Wren pushing out B&Q and providing tough competition for Magnet. Franchise operators are growing fast and squeezing out traditional, independent retailers, while Howdens is expanding, pushing out Jewson and Wolseley. The kitchen industry is certainly dynamic and ever-changing.