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23rd May 2019
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Bathroom market to outperform UK economy in 2016
A new report from MTW Research on the UK bathroom market suggests that bathroom retailers' sales will outperform the UK economy in 2016, with sustainable growth forecast throughout the year as consumer spending continues to remain high.
Based on data from 90 leading bathroom retailers, the research found that sales in 2016 are now at an historic high, surpassing £1 billion for the first time. According to the report, 2016 is set to enjoy high levels of consumer confidence boosting growth in the high value sector of the bathroom market. Rapid housing transaction growth, low unemployment and sustained vigour from specialist retailers with regard to differentiation of service are just some of the key issues identified by MTW as prompting growth across the bathroom industry in 2016.
The 190 page report illustrates how consumers are spending more time in the bathroom with a focus on wellness, luxury and relaxation driving higher value sales, sustaining optimism for bathroom retailers and manufacturers. MTW also identify the Internet of Things market (IoT) as offering significant growth opportunities across the bathroom retailers market in 2016 and beyond.
The report points to a number of IoT products already on the market such as smart showers, remote lighting and Bluetooth speaker-integrated mirrors that are utilising Internet technology. The report forecasts sustained growth from IoT devices in 2016 and beyond as consumers demand more 'connected' and digitally controllable bathrooms.
However, the report indicates that market conditions remain somewhat erratic, with some bathroom retailers, distributors and manufacturers experiencing challenging conditions in 2016, sustained in part by Internet only retailers focusing on turnover rather than profit, eroding prices further. MTW's analysis of the industry found 53% of bathroom retailers experienced sales growth in the last 12 months. Credit ratings are higher compared to the last review of the market, with almost 80% of bathroom retailers now having a 'good' or 'excellent' rating, compared to 70% in 2013.
Profitability growth is slowing in the bathroom market according to the report, as larger bathroom retailers employ aggressive pricing strategies to increase sales and gain market share. This is sustaining pricing pressure, especially in low-mid range products across the bathroom retailers market.
However, MTW's research executive James Taylor comments that, "... Although there is an observed fall in margins, industry growth is steady and there are still profit opportunities for the smaller bathroom retailers in 2016. This is particularly relevant within the luxury end of the bathroom market where pricing pressure isn't as evident and retailers can offer 'turnkey' services along with high end, well made products to grow profit."
The report identifies several product sectors which are outperforming the bathroom market in 2016, and highlights key target markets where growth opportunities are present. One example given is that the number of multigenerational families living in the same household has increased in the UK, stimulating growth in the inclusive bathroom market. This has strengthened demand for bathroom products that offer greater accessibility and ease of use for the whole family.
Bathroom retailers have also received a boost from an ageing population and affluent 50+ age 'empty nesters' who now have greater access to large savings for bathroom renovations due to recent changes in the pension system.
29th January 2016