Kitchen & Bath

In a recent study of affluent consumers who represent the 11.4 million households that account for about half of all consumer spending, the American Affluence Research Center found that 8% of the affluent consumers definitely plan a major kitchen remodeling during the next 24 months and 11% definitely plan a master bathroom remodeling project.

The kitchen remodeling plans represent a potential market of 912,000 households, and the bathroom remodeling plans represent a potential market of 1,254,000 households. The undecideds (i.e. those who are not sure) represent a potential market almost double that of the definite remodelers.

Plans for an estimated 1.7 home remodeling projects of some type during the next 12 months were reported by the affluent consumers, who account for 10% of all US households, based on net worth.

About 62% of the affluent have no plans to acquire any of the kitchen and bathroom items listed. About 10% to 15% of the affluent plan to acquire at least one of the items, with the exception of the kitchen floors and water efficient fixtures and heaters. Less than 10% reported plans for these three items. Each 1% equals approximately 114,000 potential unit sales.

A design specialist was named most often as the primary source for most of the purchases for a major kitchen or bathroom remodeling project. Home Depot, followed by Lowe’s, was the second most frequently named source.

Among those who definitely plan to remodel their kitchen or master bathroom during the next 24 months, the items they plan to purchase often vary based on the current value of their home. For example, 63% of those with homes valued below $1 million plan to acquire new kitchen floors while only 31% of those with homes valued above $1 million plan to do so as part of their kitchen remodeling project.

As an average, almost $35,000 is the most the respondents who definitely plan to remodel their kitchen could imagine spending. Almost $15,000 is the most the respondents who definitely plan to remodel their bathroom could imagine spending. Both amounts are very close to the average cost estimated in a survey of dealers by Kitchen&Bath Design News.

Age of room appears to be a useful indicator of when people are a good prospect for remodeling their kitchen or bathroom.

Ron Kurtz is a principal of The American Affluence Research Center and The Management Resource Group. Both companies provide marketing research and strategic planning services to prominent clients in the travel and hospitality industries, especially those targeting the affluent market.

Prior to founding MRG in 1989, Ron’s experience included over 20 years in senior management positions in the airline, hotel, and tour business. As the founding President of Sea Goddess Cruises, he created the product category of small deluxe ships for the very affluent. He also served as the chief marketing officer of four cruise lines, including Norwegian Cruise Line and Windstar Cruises.

Ron has been a key contributor to 6 start ups and 11 turnarounds of substantial businesses. He earned his MBA at Harvard Business School.

For further information: http://www.affluenceresearch.org and http://www.mrgconsultants.com

Febco 765