Blowing the wind out of kitchen sales

Blowing the wind out of kitchen sales

As we enter the New Year the usual suspects are promising the earth with bogus sales and headline offers. I've seen it all before and during a long career of more than fifteen years, I've yet to find a genuine kitchen sale that is truly worthy of your attention.

I'm not the only person to notice this. In July of 2016, the Guardian reported on this very subject and it made for interesting reading. Unfortunately, the report came as no surprise to me.

Everyone loves a bargain

The seductive headlines are all over the place. 40% Off Selected Cabinets or 30% Off the whole range. It all sounds great but the reality is very different. Ask yourself how often you buy a kitchen. The chances are that it's not very often. So how do you know the price you pay in the sale is significantly lower than the non sale price?

The factories that manufacture the cabinets in your kitchen don't offer any kind of sale price to the retailer. The retailer pays the trade price to the manufacturer, adds a markup and sets a price that is suitable for the market he is selling to. That 'markup' needs to cover the running of his business, salaries, marketing and future investment. The business has to be viable or the whole system will break down and that's no good for anyone.

kitchen sales are gimmicks

Are these discounts for real?

So how can a retailer justify a 40% discount and still keep his head above water? The simple truth is that he doesn't deliver a 40% discount. I hate to be the bearer of bad news but some kitchen retailers are, at best, economical with the truth. At worst they are deliberately misleading the public.

The way this is done is so simple and so obvious that you'll be amazed anyone would fall for it in the first place.

Essentially, the starting price is inflated to 40% above the necessary markup and slashed along side a well publicised marketing campaign. I know it sounds crazy but that's all there is to it.

There is a reason why a retailer will never cut their prices. In an effort to illustrate why, I'll use the example outlined in the book "Why Your Customers Suck" by Jon McCulloch.

"Let's say you're selling widgets at £135 with a margin of 35%. This means your cost of supply is £100, and you make £35 on each sale.

Now let's cut the price by 10%.

So now you're selling widgets for £121.50, meaning your profit on each one is now just £21.50. In other words that 10% price cut has slashed your profits to just :

21.50/35=0.6143 Of their previous level.

To put it another way you just cut your profits by 38.57%."

After reading Jon McCulloch's words, you'll understand why it's simply impossible for a high street retailer to offer such huge discounts and stay in business.

What do you need to do?

So what does this mean for you? Well, it means you should be far more fussy with your choice of kitchen retailer. If they are having a "SALE", you need to compare their pre-sale prices with other retailers offering a like for like product. If you feel you are being misled, then you should simply walk away. A new kitchen is an important purchase. Don't buy a kitchen from a person you don't trust.

You should also adjust your expectations. If your kitchen retailer is attempting to lure you with a low price, you should expect a lower quality product and service. There are lower quality kitchens on the market that can be purchased at a very reasonable price. If price is the most crucial factor, simply go for a low cost kitchen cabinet. As long as you understand what you've bought before you pay, you'll be satisfied with your decision. It's that perception of being misled by a salesman that will flood you with regret as the years go by.

Quality kitchens don't come off the shelf

Many modern kitchens are made to order. I know for a fact that when I place an order with my German or British supplier, the kitchen is built from scratch in the factory in line with my design and specifications. These aren't flat pack units that have been stockpiled on a shelf waiting for a buyer. You need to have a surplus of supply before you'll see a true reduction in price. That simply won't happen with a Your Space Living kitchen.

I run Your Space Living differently to the majority of kitchen retailers. Firstly, I establish a fair and reasonable price for the kitchens I sell and back that up with a level of service that cannot be beaten. I believe that makes Your Space Living the best value kitchen designer retailer around. My pricing structure is transparent and payments are staggered to help the client cope with the financial pressures that come with an extensive home renovation. That's how it is all year round and I have a long list of satisfied customers who will confirm how well this system works. Those who think it's better to pile them high and sell them cheap are in a race to the bottom, where they will be swallowed up by the bottom feeders.

kitchen sales are too good to be true

Which? Investigation

In 2019, the consumer review site, Which?, published two blog posts on the subject of "sales" in the kitchen and bathroom industry. In January of that year, Which? looked at the misconception that January was the best time to buy a kitchen. In the report by Liz Ransome-Croker, several of the UK's most well known kitchen retailers were studied using data sourced from price comparison site Kitchen Compare. The first company to be mentioned in the report was Homebase. Here is a direct quote from the first two paragraphs.

In mid-March this year, ahead of one of the biggest shopping periods for home improvement products, Homebase raised the prices of all of its flat-pack kitchens by somewhere between £80 and nearly £200, depending on the range.

Not long afterwards, it ran a promotion offering a £200 Homebase gift card when spending between £2,000 and £5,000, effectively putting the price of some of the kitchens back to what it was before the rise. 

Other companies in the report used a variety of sales incentives to attract more customers. It was concluded that, in general, there is no best month to buy a kitchen. Prices fluctuated throughout the year but promotional offers were used to keep them consistent. This required a fair bit of "reading between the lines" and the retailers themselves weren't given the opportunity to reply. Fortunately, this report was followed up in April of 2019 with a more in-depth study recommending people take KBB promotions with a pinch of salt.

This report looked at other "sales" methods such as countdown clocks to create a sense of urgency, along with potentially confusing multi-buy offers. In this more detailed report, some of the retailers were given the right to reply. I found some of the responses more confusing than the offers themselves. Wren's in particular had me reaching for my Economics GCSE text book for clarification.

Wren Kitchens disputes our findings and maintains that it’s perpetual multi-buy offer is to ensure economies of scale in production and not to entice or mislead consumers. It told us that it had prepared its 2018 and 2019 promotions in conjunction with the ASA and all relevant guidance.  

Both of these reports are a damning indictment on a industry who's too quick to sell and too slow to serve. Unfortunately, based on the content of both reports, there doesn't look to be any reforms on the horizon.  

The next time you see an advert for a kitchen retailer that offers a huge discount on a new kitchen remember the old rule. "If it looks too good to be true, it probably is." Now I've you've seen how things really work, don't get caught out by an unscrupulous cupboard salesman. And if you need help or advice from someone who's looking out for your best interests, give me a call. I'll be happy to go into more detail and help you get the best result for you and your home.

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