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Under Construction: Price Sensitivity Rises in Home Improvement Category

1 Mins read

Throughout most of the COVID-19 pandemic, rising prices didn’t affect consumer demand for “core kitchen and bath improvement products.” This, according to The NPD Group, which reports that last year, “the average selling price of products related to kitchen and bath home improvements increased 5%, and unit sales rose 15%.”

But NPD’s Retail Tracking Service data shows this trend started equalizing toward the end of 2021, with an 8% fourth-quarter increase in both average selling price and unit demand compared to 2020. And so far this year, the data shows “a more traditional correlation between prices and demand, with an 8% increase in average prices and a 2% decline in unit sales in February.”

NPD’s home industry advisor, Joe Derochowski, says, “The kitchen and bath home improvement market is at the crossroads between seemingly unshakable consumer demand and impending vulnerability. As consumers begin to emerge from their home-centric pandemic lifestyle and behaviors of the past two years, their needs, spending, and demand will continue to shift.”

The data shows that faucets and sinks seem to have been particularly impacted by demand more than by prices. NPD reports that since the beginning of 2020, these products were “in high demand with no notable price influence through most of 2021.” However, this January and February, unit sales of both faucets and sinks decreased as prices continued to rise.

Other kitchen and bath products, such as bathtubs and whirlpools, experienced low demand, despite low prices in 2020. And when prices for these items rose in 2021, demand declined even more.

This “demand variation across categories signals the need to reevaluate pricing and promotional strategies for home improvement products, based on the consumer’s current frame of mind,” says Derochowski. “This is the time to take action in order to inspire continued consumer demand and maximize business potential.”

As we’re currently remodeling our bathrooms, I can add that consumers are well aware of supply chain issues. I ordered a new toilet, and when I found out less than two weeks later that we’d need another for our guest bathroom (mold issues), I tried to order the same one—and it was out of stock everywhere I checked. I then ordered everything I thought we’d need weeks before we’d need them, which is why a toilet and bathroom vanity are sitting in the middle of my living room.

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