Glasgow bathroom retailer Derek Miller looks back on a successful 2015 and is optimistic about the coming year
As thoughts begin to turn to the end of the year, I am left with one overriding thought – namely, where on earth did 2015 disappear to? Since Scope first entered the fray in 1999, 2015 has been our busiest and most demanding year. The recession has ended with a bang, and the market seems to be pumped up by steroids.
This frantic return to form is confirmed by our suppliers, all of whom are running faster and faster just to keep up with demand. This, of course, is great news, but the Christmas break will be very welcome all the same.
For a contracts-driven business such as ours, the festive season is the only time of year where demand eases off. All sites close for around 12 days, the contractors sit at home eating mince pies and Quality Street, and the only calls I receive are from robotic voices telling me that a £3,000 PPI claim is sitting in an account with my name on it.
In our house, the only downside of Yuletide is the endless bombardment of the same old festive tunes that have been played each December since the 1970s. By the time Christmas morning comes around, I’ll be standing by Mrs Miller’s prized Roberts Radio with a hatchet, ready to pounce like a madman when Paul McCartney’s ‘Simply Having A Wonderful Christmas Time’ is belted out yet again on Radio 2.
As I look back at 2015, however, my general feeling is that we have much to be thankful for. From discussions held regularly with suppliers, it would appear that everyone has enjoyed some improvement this year. However, the largest growth has been experienced by those brands that compete strongly in the contracts arena, where the real upturn has taken place.
The retail market has undoubtedly improved also, but such is the increasing impact of the volume online sector that it is very difficult to judge where the market truly is. The contracts situation is far more clear-cut. 2015 has produced unprecedented growth in house building and hotel refurbishment as the market rectifies itself after an extended period of low activity. Those manufacturers who were brave enough to invest in their infrastructure in 2012/13, and who had the capital reserves to do so, have enjoyed particular contracts success this year, ready, as they were, to take business from lesser competitors.
But what are the prospects for 2016? Given the Government’s commitment to the growth of house building, it is probably safe to conclude that 2016, and indeed 2017, should be robust for our sector. The knock-on effect of people moving on to – and up – the housing ladder will also benefit KBB retail land as old bathrooms and kitchens are ripped out in favour of sexy replacements.
The international economy remains somewhat shaky but the UK is performing very well and has the strongest currency in the world. As is always the case, the South-East of England is enjoying the lion’s share of investment, but this is now having a ripple effect throughout the country.
If there are to be any banana skins on the immediate horizon, it will be that demand will outstrip the ability of manufacturers to supply. We are already seeing some evidence of backlogs and I am concerned that this could worsen next year.
Manufacturers must ensure that their factories are geared up to meet growth, not just for the UK, but for all international markets. We can’t reach a situation where he who shouts loudest gets the stock, although I am rehearsing my roughest Glaswegian brogue, just in case! Those companies who source from independent Chinese factories will face yet more challenges and may have to accept price increases to guarantee production slots. Lead times from China are sluggish at the best of times, but my feeling is that these will increase over the next few years.
All in all, however, 2015 has been a very good year for the KBB industry and there is good reason to believe that 2016 will follow suit.
I will take this pleasing thought into my Christmas break… and ask my wife to switch off the radio.
Merry Christmas and best wishes for the New Year.