Second only to consumers making decisions at a snail’s pace, the impact of supplier price increases was one of the biggest challenges mentioned in kbbreview’s Retailer Confidence Survey back in June.

Although that survey was designed to capture a snapshot of overall issues across the sector, it was mentioned by so many retailers that we decided to dig into this issue in a bit more detail.

Almost unanimously, virtually all of the retailers we spoke to said they’d seen prices rise over the last 12 months. “Most of our suppliers have increased their prices by between 3% to 5%,” observed Graham Ormerod, showroom manager at Hillside Kitchens. “For the majority, the raise was 5%, and those who chose a smaller 3% raise did it again later in the year.”

And this increase rate seems pretty standard according to all of our contributors; Tom Setchell, managing director of RFK, said he’d noticed a typical price rise of around 3% or 4%, and Andrew Slaven, managing director at ELS Bathroom & Kitchen Studio, said he’s “come to expect a yearly rise of around 5%”.

In fact, although retailers mentioned supplier price rises as a key concern in June’s Retailer Confidence Survey, the issue of lofty price rises has been a worry for the last couple of years. The vast majority of retailers kbbreview asked think Brexit and Covid specifically were the starting points this particular phenomenon.

Interestingly, some retailers even think the rises have eased slightly over the last 12 months, but still blame Brexit and Covid on the situation being particularly bad now. A spokesperson for Hoddesdon-based retailer Bathroom Spare Parts said they personally didn’t feel that prices had increased dramatically since this time last year, but still agreed that “Brexit and Covid-19 had a massive impact on our margins and customer pricing”. Although they were quick to note that since then, price rises “seemed to settle down to sustainable annual increases”.

Similarly, Kenneth Luck, director at bathroom retailer Luck & Fuller, said he’d “not seen a huge amount” of price increases from his suppliers, observing that there has in fact “been price steadying since Covid”. He added: “None of these prices came down, so I think suppliers have been having additional profit since Covid and this has allowed for minimal price increases.”

Passing problems

lthough some retailers seem to have escaped unscathed, the vast majority admit to feeling the price pinch over the last few years. But if that’s the case, where do they make up the difference to protect their own margins? Is the solution simply to pass on this extra cost to customers?

“We pass them on so there’s no impact on our margin”, confirms Paul Whiers, partner at Interiors of Harrogate. Similarly, another retailer who asked to remain anonymous agreed with Whiers, explaining: “My project pricing model is based on retail less a fairly fixed percentage, so yes, the cost of the increase is passed on to customers.”

Peter Hirsch, managing director at Total Bathrooms, explained: “We tend to increase the RRP as the suppliers do so that the increases are largely passed on to the customers. Although they are price sensitive, so like our sales and deals.”

However, Stephen Flower, managing director at Ashford Kitchens & Interiors, believes it isn’t quite that simple. Although he admits “when supplier prices rise, we do pass the increase”, he says it has to be done “carefully and not always instantly”, explaining that his business assesses the impact on its margins and adjusts the pricing as needed. In Flower’s own words, the key is “always aiming to maintain value for our customers.”

According to Hamid Abdi, proprietor at Elysee Kitchens & Interiors, it’s not so much a question of whether you choose to pass the cost on to clients, but if it’s even an option, noting that “It’s getting harder to pass on the increases to prospects, so this is affecting our margins”.

Similarly, Tom Setchell believes, “It’s always difficult to pass on price increases to pre-existing customers, and it can sometimes sour the relationship if you try”. Although in his experience, an unexpected price rise can actually help in some cases, explaining: “It’s always better to use the threat of price increases to secure new business before the price increase takes effect.”

So with most retailers in agreement that they’ve seen price rises (and many admitting they’re worried they could become an annual feature of the KBB calendar), are ongoing price rises like this really sustainable within the industry?

“No, I do not think they are,” answers Gary Evans, director at G D Evans Interiors, returning to a common theme as he says, “I think that it is a bit of the case of jumping on the bandwagon since Brexit and Covid”. 

He also says that since that time, his business has increased its quote orders by 25% or more, which restricts sales as, in his own words, “most of our customers are not higher wage earners or are retired people”. He concluded that current rises were “definitely too much in this current environment of concerns over financial stability”.

Similarly – although taking a slightly more grim view – Slaven from ELS wonders: “How long before it all comes crashing down when people have no more spendable income? It just seems to be accepted by retailers, I’m not sure how long it will be sustainable for though. If suppliers are having price increases, distributors have to follow suit. It seems to be the same with everything at the moment.”

However, slightly more positively, Tom Setchell from RFK questions if perhaps supplier cost rises are becoming more manageable than they were a few years ago? He acknowledges: “None of us like price increases, but this year’s rounds have been a lot more manageable than the previous few. It’s easy to take the hit on a couple of percent that is anticipated, compared with the dramatic price increase we have seen in the last few years post-Covid.”

Gary Walmsley, managing director at Designer Walls & More, also believes that rises to the same standard as in previous years aren’t sustainable. However, he argues that the big players in this sector will likely be able to continue to raise prices if they want, but only if they’re able to lean on their brand status to justify it. Making an example, he said: “If Apple put up their prices minimally, people would still buy, because its quality and brand awareness says it’s worth it.”

But with a decent portion of retailers saying that astronomical price increases are beginning to become less frequent as we move further and further away from the dark days of Covid, could we finally be starting to see the light at the end of the tunnel?

Supplier switch?

On the topic of suppliers increasingly putting prices up, retailer Hassan Jaffar firmly believes that “some suppliers have put too much on”, and said that as a result, his business had gone as far as changing suppliers to those who offered lower prices. Although an extreme course of action, how likely are other retailers to switch suppliers over cost?

Because the supplier-retailer relationship is so multifaceted, although product cost is a massive consideration, it’s certainly not the only factor.

When asked if he would change suppliers over repeated price increases, Hamid Abdi said: “Perhaps… but we still think quality and overall performance are very important. So long as the price increases are somewhat manageable, we would not consider changing suppliers. Also it is not an easy process which involves familiarising yourself with new product ranges and things like that.”

However, one retailer, who again asked not to be named, admitted: “In an informal way, I am actually changing suppliers over this right now, replacing display brands with a different supplier’s once they’ve been sold. I feel like some brands we previously included reasonably regularly are effectively pricing themselves out of the fairly limited market available.”

From the premium end, Kenneth Luck said that although repeated price increases wouldn’t necessarily cause him to drastically change suppliers, “we may find ourselves not quoting these products if the pricing became too high. 

“Our customers do have a budget (although higher than some) and we must stick to this. We may need to use alternative suppliers to meet our customers’ brief though.”

And with cost increases hitting businesses from all angles, how bad are the rising costs from suppliers compared to country-wide worries like the higher national insurance rates? 

Another retailer who would rather remain anonymous actually said supplier price increases were among their smaller worries, explaining: “We work to RRP in the main and our margins have not really changed after deductions, errors and discounts. The real impact on our business is therefore anything that impacts overheads such as rent reviews, increase in rates, NI and salary reviews.”

Meanwhile, Graham Ormerod believes that compared to the rest of the increases, there’s a particular sting to the rise in supplier costs. “We’re all feeling it but I do think that suppliers add a little more on,” he shares, “no matter what, year-on-year supplier prices have increased above inflation. The general growth in those prices is normally much more that what we’ve seen wages increase by, or the country’s own economy.”

And putting his crosshairs on the government instead of the industry, Peter Hirsch recalls: “During Covid, I would say that other costs were increasing in a similar manner but recently, with the current anti-business government, other costs are now increasing faster.”

Tom Setchell says “NI and business rates have been a much bigger hit this year,” concluding with the age-old retailer refrain: “Of course, what we all really need is more customers!”

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Manufacturers say…

Although the ones most likely to complain about supplier price rises are, by nature, retailers, we thought it’s only fair to also ask suppliers what they made of those complaints. Unsurprisingly, very few were comfortable going on the record to admit to upping their prices, but it’s still worthwhile to hear their reasoning.

A spokesperson for one supplier did acknowledge they’d increased their prices in June of this year, but added the caveat that this was their first increase in more than two years, saying: “We feel the increase was justified as our production process is heavily reliant on manpower”. Just like retailers, this supplier admitted that they’d also been grappling with the increase to business rates, citing that even though they pay above minimum wage, the threshold was still a factor in their pay reviews.

Asked if they feel like retailers understand the reasoning behind price increases, the supplier answered: “I do feel retailers are aware of increasing costs, but perhaps sometimes overlook the fact that a manufacturer’s gross margin is significantly less than a retailer’s margin, hence cost increases cannot be easily absorbed.”

On a similar note, another said: “As a manufacturer we are being hit by supplier price increases which includes electricity – our energy costs are significantly higher than they were three years ago. The cost increase of components is not sustainable as many suppliers are in danger of pricing themselves out of the market.”

A third supplier proudly explained that they hadn’t increased prices in 2025 or 2024, and only planned to increase prices on a single product range next year. When asked for their reasoning, they said: “It is vitally important to maintain price stability, in light of the surcharges and price hikes from Covid, the market is growing again (slightly), but it remains fragile and subjective.

“Surely taking ‘the long game’ approach to full market recovery is a good policy and secures good relations with retailers? That gains you longevity as a responsible and supportive supplier through difficult times!”

And in a very pleasant surprise, one supplier even said they’d gone so far as reducing their prices by as much as 5-25% in their latest design guide. When asked how, the supplier cited improvements in productivity – and in an echo of what several retailers mentioned to us already – having recently changed their own suppliers.

While retailers are clearly (and understandably) worried about price increases happening on such a frequent basis, it can be easy to forget that this is clearly not a problem unique to the retail arm of this sector. Just as consumers must be surprised by the rapidly increasing cost of a kitchen or bathroom renovation, suppliers also sound like they’re fighting to protect their own margins from factors well beyond their control.