Kbb News - Bathroom Retailer Wickes says Bathroom spend is up by 80% in the last three years, despite Wickes posting a 4% drop in the first half of its 2024 sales. At the time its 1st half sales were released in July a Rueters report said that the bathroom retailer Wickes was "dented by weakness in its design and installation business as consumers avoid big ticket purchases amid a cost-of-living crisis".
Perhaps Wickes knows something Rueters dont?
Apparently the claim that 'bathroom spend is up by 80% in last three years' was one of the findings of Wickes’ recently released Great Bathroom Report, which aims to examine consumer trends around bathroom designs and renovations and their impact on the Kbb industry.
Whilst it isnt clear how Wickes arrived at this 80% growth in the bathroom industry spend over the last 3 years, given its own revenues don't follow that same growth, looking at some of the biggest players in the industry, we couldn't find support for such an increase, as claimed by Wickes either.
Wickes own revenues were £1.55bn in 2023 and £1.53bn in 2020 as highlighted in their 2021 trading statement. A rise of just 1.3% in the 3 years 2020 to 2023. As such, a little way off the 80% rise in bathroom spend as quoted in recent press to say the least. But when taken into context amid a 4% drop in the first half of 2024, unless the second half of 2024 is better for Wickes, then the last 3 years have seen a decline in their revenues and not an increase at all.
At Victorian Plumbing PLC, revenues grew from £208m to £285m, a rate of growth of some 38% in the last 3 years which was way ahead of most of the market. By comparison, revenues as B&Q grew from £3.71bn to £3.84bn and a more modest, 3.8%.
Online Home Retail Limited (parent of Plumbworld) saw revenues increase an amazing 66% from £61.4m in 2020 to £102.8m by end of 2023 which even surpassed Victorian Plumbing.
Victoria Plum increased its revenues to £113.6m in 2022, up from £63.7M in 2020 but spectacularly went into administration at the start of 2024, only to be bought out by longstanding rival, Victorian Plumbing and was then recently shuttered up for good.
But the rise at Victoria Plum was the biggest rise we could find in the UK bathroom industry and whilst this growth was amazing the Victoria Plum revenues were the revenues of just one (albeit a big top 10) retailer in the UK market and as such come nowhere near what the average rate of growth for the entire market would be.
Buy It Direct, the retailer who bought out Better Bathrooms saw its revenues increase from £295.4m in 2020 to £354m in 2023, a rise of 19.8%.
Given then, that none of the revenues listed above, from some of the biggest [top 10 bathroom] firms in the UK bathroom industry dont portray a rise in revenues of 80%, the average growth across the entire industry is obviously going to be more modest.
Our own research noted that Mintel has indicated that the UK bathrooms market is worth some £1.7bn in annual revenue as of 2024 and the average complete project value of a bathroom according to Victorian Plum is £7,200. Past Kbb press mentions indicate the average cost of a new bathroom in 2020 was circa £6,000 so again, no 80% rise in the spend if Wickes meant it was the average project size?
Again, casting doubt on where Wickes got its 80% rise in bathroom spend figure over the last three years from, as most independents in the Kbb market can attest, the Covid home improvement market saw a drop in 2020 as the market struggled with supply chain issues, lockdowns and the impact on their workforces from these lockdowns as everyone from factory workers manufacturing bathroom furniture to the fitters installing it, their jobs cannot be done remotely from home.
As such, many feel that 2021 wasnt such a great year growth wise as the 2020 drop was so significant that only now, some four years later are we close again to pre-pandemic conditions, essentially meaning a four year stagnation in the market.
A market report at the time said the UK bathroom market saw a value decline of 16% in 2020 when compared to 2019 but trying to get a market overview of 2019 is like asking an MP to account for their undeclared gifts as past market data is behind numerous industry report paywalls.
Market research firm Mintel also said the UK bathroom market growth was slow in 2023, as consumers opted for cost-efficient upgrades over complete refits and that by the end of 2024, Mintel estimates consumer spending on bathrooms and bathroom accessories to reach £1.7 billion.
But the key takeaway from MIntel is that they noticed consumers opting for cheaper bathroom projects over total refits, thus indicating a drop in the average bathroom project spend, which we did consider that perhaps Wickes may have been confused over and in their claim, they meant to say project spend up?
But that Rueters report back in July [when reporting on bathroom retailer Wickes' financials] Rueters stated that Wickes sales were "dented by weakness in its design and installation business as consumers avoid big ticket purchases amid a cost-of-living crisis"?
This surely confirms that Wickes itself is seeing less "big ticket purchases" and therefore it cannot account for an 80% increase in either the size of the bathroom market, or an 80% rise in spend of the average size of a bathroom project?
So What is the true state of the UK Bathroom Industry?
Mintel's previous research indicated that the UK bathroom market was worth £1.45bn at the start of 2022, indicating a more modest increase of 17% in the three years 2021 to 2024.
Furthermore that the bathroom component of the Kbb market is expected to grow by some 16% from now in 2024 and into 2029, indicating a further slow down to the rate of growth.
A different study to Mintel's expects the bathroom market to see Compound Annual Growth Rate (CAGR) of 2.58% over the years 2023-2028, which equates to some 15% over the 5 years to 2028 and closely mirrors Mintel's figure of 16% from 2024 to 2029.
But when you factor in the 16% decline during 2020, 17% growth in the three following years of 2021 to 2024 means a 1% rate of real terms growth.
However when taken into context, this 1% rise in real terms growth isnt even stagnation when you then consider the very high inflation over the same period which would require that to just stay on an even keel, the market needed to have grown by 23.47% due to the erosion in the value of money during this time.
So, rather than Wickes saying 'Bathroom spend up 80% in last three years', a closer 'real terms' answer is that the bathroom market is down 6.47% in the last three years, (i.e, 17% growth against inflation of 23.47%).
Lets be honest here.
If the past 3 years had seen 80% growth in bathroom spend, as claimed by bathroom retailer Wickes, then we must all be on a different planet or in another dimension as no company financial report, no market overview, and no past press mention from 2019 to today, comes close to 80% growth to either total bathroom market spend, or the project spend.
If only though, as the past three years have been sh*t, on a sh*t sandwich and offered with a side of crap.
For bathroom retailer Wickes sake, we hope that the people compiling their Great Bathroom Report are not the same people responsible for their next statutory financial statements....
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