German kitchen furniture manufacturers achieved sales of 3.4 billion euros in the first seven months of this year, a decrease of 7.7 percent compared to the same period last year. 'The weak consumer sentiment and the crisis in housing construction have had a noticeable impact on our industry so far this year,' says Stefan Waldenmaier, Chairman of the Association of the German Kitchen Furniture Industry (VdDK), today at the annual economic press conference in Löhne.
Waldenmaier is cautiously optimistic about the coming months: 'We are assuming that the second half of the year will be stronger for our companies than the first half.' Although the weak construction activity continues to lack important impulses for kitchen demand, the flattening of inflation and real income growth give hope for a slight revival in consumer spending. People also began to focus more on furnishing their homes in the fall and winter.
'The reason for buying a new kitchen is not only a move, but above all a renovation of the existing apartment,' reports VdDK managing director Jan Kurth, referring to a consumer survey commissioned by the VdDK and carried out by the market research institute Kantar. 'The desire for a kitchen upgrade is also particularly strong among customers aged 45 and over. Overall, prospective buyers are primarily looking for a kitchen costing between 5,000 and 10,000 euros.'
In the consumer survey, 43 percent of consumers who are planning to buy a kitchen this year or next year said that they were remodelling or modernizing their existing apartment/house. In second place (25 percent) is the desire for better equipment and a more modern design - as expected, this increases with the age of the respondents. 18 percent of respondents cited moving as the reason for purchasing a new kitchen, while 14 percent cited technical defects in their current kitchen.
Photo: Dreamstime.
A large proportion of prospective buyers (40 percent) are looking for a kitchen priced between 5,000 and 10,000 euros. 27 percent of those surveyed want to spend less than 5,000 euros. 19 percent are planning to spend between 10,000 and 15,000 euros. 11 percent of those who have decided to buy have set themselves a budget of between 15,000 and 20,000 euros. 44 percent of all respondents say that their current kitchen is less than 10 years old. 27 percent of those surveyed have a kitchen that is 10 to 15 years old. 14 percent of those surveyed report that their kitchen is 15 to 20 years old. 15 percent of consumers say that their kitchen is more than 20 years old.
According to association statistics, the value of orders received by the German kitchen furniture industry from January to August of this year was around 5 percent lower than the same period last year. In terms of unit numbers, this represents a decline of 6.5 percent. In view of the subdued demand, 14 percent of the kitchen furniture manufacturers surveyed in an association survey used the short-time work instrument in August. This puts the kitchen sector well below the value of the industry as a whole, in which 38 percent of the companies surveyed had applied for short-time work in August. Almost 36 percent of the kitchen furniture manufacturers surveyed are planning short-time work for the fourth quarter of 2024 (industry as a whole: 40 percent).
In the first seven months of this year, the 46 German kitchen furniture manufacturers with 18,200 employees generated sales of 1.8 billion euros on the domestic market (minus 8.7 percent). Foreign sales of 1.6 billion euros (minus 6.5 percent) contributed 46 percent to the total sales of the kitchen furniture industry. The export ratio is therefore significantly higher than the average for the entire German furniture industry (33 percent).
There were losses in almost all European markets from January to July. Furniture exports to the most important export country, France, fell by 9.3 percent to 353 million euros. This was followed by the Netherlands (minus 7.3 percent), Austria (minus 7.1 percent), Switzerland (minus 5.5 percent), Belgium (minus 8 percent) and the United Kingdom (minus 8.9 percent). Fewer furniture was also delivered to China, which came in seventh (minus 5.6 percent). In contrast, demand from the United States rose sharply by 18.2 percent, which is probably also due to the German joint appearance at the most important American kitchen trade fair KBIS, which has been organized for the third time.
Imports continue to play only a very minor role in the German kitchen market. In the first seven months, kitchen furniture worth just 81 million euros was imported (minus 13 percent). The most important supplier countries are Poland, Italy, Lithuania, Austria and China.
The German kitchen furniture industry is facing major challenges due to excessive bureaucracy. The EU Deforestation Regulation (EUDR), for example, entails considerable effort, says Waldenmaier. The required proof of a deforestation-free supply chain and the necessary data transfer throughout the value chain require extensive adjustments to the IT systems and interfaces. The regulations for kitchen furniture manufacturers cannot be implemented within the planned time frame - the proof requirements apply from December 30, 2024 for products that contain the raw material wood. 'While politicians are setting unrealistic requirements for the industry, they themselves cannot meet the planned timetable for installing the EU information system,' criticized the VdDK chairman and urgently called for the entry into force to be postponed by two years. Federal Agriculture Minister Cem Özdemir recently called on the EU Commission on behalf of the federal government to postpone the start of application of the EUDR by six months to July 1, 2025. 'This additional period is not sufficient to make the necessary adjustments,' says Waldenmaier.
The industry is actively counteracting the shortage of skilled workers, another major challenge - with the furniture industry training factory, which will open in Löhne on November 5, 2024. The ultra-modern training center, which maps the production process of a typical furniture manufacturing company, will provide a wide range of educational opportunities. The entire range of job profiles in industrial furniture manufacturing is covered, including wood mechanics, mechatronics engineers, IT specialists, machine and plant operators and commercial trainees. The furniture industry training factory represents the third pillar in dual training: In addition to practical work in the company and theoretical education in the vocational college, those starting their careers come to the training factory for individual training modules. 'We are looking forward to the start of our lighthouse project to recruit young talent and skilled workers with great pleasure,' said Kurth. Numerous kitchen furniture manufacturers are participating in the showcase project initiated by the furniture associations.
For the full year 2024, the association's managing director for the German kitchen furniture industry expects a decline in sales of 5 to 7 percent. In the medium term, the current increase in demand for real estate financing is giving rise to some optimism. The importance of the kitchen has also increased significantly over the Corona period. This and the solid positioning of the German kitchen furniture industry with its state-of-the-art production facilities will pay off.
More information:
VdDK
www.vhk-herford.de