The first quarter of 2026 has produced an unfortunately familiar divided picture for the KBB retail sector. For every retailer reporting a difficult start to the year, another says business is improving and some say demand has never been stronger.

That split was one of the most common topics of conversation at kbb Birmingham last month.

At the start of March, the aisles of the show were full of retailers looking for new products and exhibitor stands packed with companies keen to show their latest ideas. That’s the primary purpose of trade shows, so a big tick there.

But the secondary purpose is networking – catching up with people you know and meeting new ones who might become valuable partners in the future.

And that is where the real questions get asked. How’s business so far this year? How is footfall? Are clients still taking ages to make decisions? And how do you see the rest of the year playing out?

So we put those questions to around 100 independent KBB retailers and the results provide a fascinating snapshot of performance in the first quarter of 2026 and confidence levels for the rest of the year.

At a headline level, the picture shows that split. Just over a third of retailers (34%) said their business had performed badly in the first quarter. However, exactly the same proportion said it had performed better. In addition, just over one in ten (11%) said their business had performed brilliantly.

If a crude measure of market health is whether more retailers say they are doing better than worse, then the result has to be seen as cautiously positive.

When asked why they were performing strongly, one retailer admitted even they didn’t really know why: “I’m not really sure, but we can’t keep up with the demand this quarter…”

Another offered a more analytical explanation: “We had a 40th anniversary sale throughout January which we advertised heavily. This brought in a huge number of new and returning customers. We did offer substantial discounts for the month and this seemed to secure a higher-than-normal number of large supply-only orders.

“Although February and March have been quieter, we’re still seeing a steady stream of customers and quotes going ahead even without the sale discounts.”

For those performing worse, some blamed a more general market malaise. “Enquiries are definitely down and it wasn’t a great year last year,” one retailer told us.

“We remain booked up but not as far ahead in the diary as in previous years. Last year was also very sporadic with enquiries. The market does not seem as buoyant as it once was.”

One theme came through strongly from many respondents – the impact of geopolitical events out of their control.

“There still feels like a suppression in the market,” one said. “Every time there seems to be some good news, like inflation going down, Trump decides to bomb something. So there is now huge uncertainty with homeowners and this has a definite knock-on effect for retailers.”

Another added: “January was very flat this year compared with an excellent 2025. People seemed very slow to come out this year, although it is starting to flow now. But the effect that war in the Middle East will have on the cost of living is yet to be seen.”

Last year

So how does this compare with 2025?

We asked retailers whether their performance was better or worse than the first quarter of last year. Again, the picture was mixed.

Two-fifths (41%) said this year was better or much better than the same period in 2025, while a quarter said it was about the same.

However, nearly a quarter (23%) said it was a bit worse and one in ten (11%) said it was much worse. In other words, around a third of retailers feel their fortunes have declined further as the market remains challenging.

For many respondents, the blame lies squarely with the current government, which they often view as hostile to small businesses.

One retailer, who said business had got much worse, said: “The Labour Government has no concept of what generates growth. They are ideologically opposed to entrepreneurship and believe small businesses are run by opportunist chancers who deserve to be hounded with taxes and bureaucracy. A playground would have a clearer understanding and the school fete would be more profitable.”

But the contrast is stark among retailers who say their fortunes have improved.

“Our diary is full for installs and we’re getting plenty of enquiries. In fact, we’re losing some work because we can’t do it quickly enough,” one said.

Another added: “We are taking fewer orders but the orders placed have been of a higher overall value, indicating customers are looking for more expensive and higher-quality products.”

Footfall

Footfall is one of the clearest indicators of customer sentiment. If people are walking through the showroom door – or engaging digitally – then at the very least they are considering a purchase.

Here too, the industry remains divided. Nearly half of retailers (48%) said their footfall and enquiries were good or excellent, while one in five (21%) said they’d stayed the same. However, 29% said they were worse.

For those reporting strong footfall, the explanation often came down to solid traditional marketing and reputation.

“We are an established kitchen business and get a lot of recommendations,” one said. “We also put signage outside all our projects and on sponsored roundabouts in busy areas of the town. Finally, we post regularly across all social media platforms.”

For those seeing weaker footfall, reasons were typically macro–economic. “I think the constant bad news about the economy and wars are making people apathetic about big purchases,” one retailer said.

“A poor economy, high inflation, rising energy, fuel and food costs, plus the constant fear of war all contribute to people feeling like things will only get worse and they need to hold on to their savings. We need some good news.”

Despite this divide, retailers remain remarkably confident in their ability to convert customers once they reach the showroom.

In fact, 60% said their conversion rate from enquiry to sale was good or excellent. A further 28% said it had stayed the same despite the tough market. Only 13% said it had worsened.

“Our conversion is always excellent,” said one retailer. “Most of our business is repeat or recommendations. We generally have a conversion rate of 90% plus.”

Another added: “We pretty much convert everything we quote for. We have only lost two jobs this year.”

Confidence

Finally, we asked retailers to score their confidence for the rest of 2026 out of ten.

The average score came in at seven – solid and cautiously optimistic. But the detail once again reveals a divided industry.

Nearly two in every five retailers (39%) rated their confidence at five or below, while 43% scored it at seven or eight. Notably, no one rated their confidence higher than that.

This means almost two fifths of independent KBB retailers remain genuinely pessimistic about the next nine months.

Among those with lower confidence scores, one issue kept resurfacing: global instability.

“The US war with Iran will bring uncertainty to the market as well as price rises across the industry due to the rising cost of fuel,” one retailer said.

“The longer this war goes on, the greater the impact it will have on the global market and the cost of living.”

Another agreed: “With all the problems in the Middle East I cannot see growth happening anytime soon. If fuel prices rise then inflation will increase again. Our customers are people who have savings, but they are also extremely cautious.”

Retailers who expressed higher confidence tended to focus less on the wider market and more on their own business.

“Our installers are booked up almost as far as September and our new enquiry procedures seem to be delivering better results,” one said.

Another added: “We are very confident in our showroom and service. We also have a large plumbing and heating trade counter which has grown in customers and turnover every month since we opened it in 2024. We have also expanded into kitchens this year and that side of the business is growing steadily.”

Ultimately, the first quarter of 2026 suggests the gap between the industry’s haves and have-nots is widening.

For some retailers, demand remains strong and confidence is high. For others, enquiries remain thin and uncertainty dominates.

The market itself may not yet be recovering – but it is clearly separating the winners from the rest.

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Supplier snapshot

Suppliers paint a slightly more cautious picture than retailers, although many say trading conditions remain broadly stable.

Just over two-fifths (42%) said business had performed as expected – which in the current environment must be seen as a relatively positive result. A quarter (24%) said they had performed below expectations.

One supplier who said it had been as expected explained: “In general the market is driven by intensive sales activity as well as promotion, which is keeping the wheels in motion. The bigger players can weather the storm better than the smaller ones, so we feel a lot of price pressure from smaller customers. We planned a very small increase on the previous year, mostly driven by price increases, as in general the market is flat.”

Nearly half (46%) said the first quarter was much better than the same period in 2025, with another 14% saying it had been the same. This still leaves just over a third (35%) saying performance was worse.

“Repeat business has slowed,” said one supplier who rated it worse. “As have enquiries for everyday advice and items. Clients are less optimistic and footfall is lower.”

Suppliers’ enquiry levels have also been mixed. Just over a quarter rated them as good or excellent, while the majority (46%) said they had stayed the same. A still significant 27% said they were worse.

“In general, the market’s tough,” one supplier told us. “We expected enquiries to remain around the same as last year but they are down in comparison. The positive is that there are fewer time-wasters and orders have increased.”

So if the average confidence level among retailers for the rest of 2026 is seven out of ten, what do suppliers rate for themselves?

Their average is slightly lower at six out of ten, with a third (34%) choosing five or below. However, no one scored higher than an eight.

“We are working hard and remaining focused to move the business forward,” said one supplier who scored their confidence at eight out of ten. “It must improve eventually.”

As with retailers, those suppliers with lower confidence scores tended to point to the same underlying causes: geopolitical instability, fuel prices and wider cost-of-living pressures.

“Carnage ensues with the wars in Europe and Iran,” one said. “We all believed fuel prices would come down but not now. Everyone will tighten their belts even further. Although the government could never have planned for the issues, they can’t even seem to envisage a way forward.”