US KITCHEN REMODELING

Order #: F1509_2006TX; US$2995.00
Published by Mintel, Nov 2005: 42 Exhibits

The U.S. market for kitchen renovation will reach nearly $17 billion by the end of 2005. Home remodeling in general has seen remarkably strong growth since 2000, and kitchens have been a leader in the remodeling market during that time. This performance is due to a variety of factors, including low interest rates, high (and rising) housing values, and the further increase in home equity that comes from making upgrades to one’s home.

The majority of the market is dominated by professional services, because of the more complicated plumbing and cabinetry work often associated with kitchen remodeling. Nonetheless, the do-it-yourself segment remains strong, and could continue to grow as the Hispanic population increases. The Hispanic population has shown a stronger tendency toward DIY projects, which is partly a result of their experience in the remodeling and homebuilding industries in which many are skilled trades people. The DIY segment of the market is also affected by household income levels, with lower income households often opting for DIY in order to afford remodeling projects.

The remodeling market in general and kitchens specifically benefits from low interest rates and rising disposable incomes. Mintel expects that the up-tick in interest rates that is evident in the second half of 2005 will continue in 2006, which should slow the incidence of refinancing and securing of home equity lines of credit, thus somewhat slowing the kitchen remodeling market as well. Barring a surprisingly negative development, however, substantial growth will still occur in 2006-10.

Kitchen remodeling sales include the following:

• sales of DIY products through retailers such as Home Depot and Lowe’s
• kitchen remodeling completed through the hiring of professional remodelers and builders, who handle individual components (such as sink or countertop replacement) as well as full kitchen rebuilds.

This market does not include components that are used in other parts of the house, such as hot water heaters, heating, air conditioning, etc.

Some companies mentioned in the report include:

Home Depot, EXPO Design Center, Lowe’s, Menards, Sears, Kitchen Distributors of America (KDA), Home & Garden Television (HGTV)

• Introduction
• Other relevant reports
• Definition
• Abbreviations and terms
• Abbreviations

• A kitchen remodeling boom
• Lower interest rates and steady disposable income levels spur interest in remodeling
• Knowledge of demographic differences is key to targeting solutions
• Professional services dominate the market
• A highly fragmented market with no dominant suppliers
• Advertising varied—large companies follow traditional routes, word-of-mouth works best for smaller suppliers
• The future hinges on home values and interest rates

• Low interest rates spark boom in refinancing and renovation
      -Figure 1: 30-year Fixed rate mortgages, 1999-2004
      -Figure 2: Incidence of home improvement activity funded by home refinancing, 2004
• Growth in major renovation levels
      -Figure 3: Homes undergoing major renovations, 1985-2000
• Clear trend toward upscale projects
• Demographic differences impact the structure of the market
• Baby Boomers leading the way by hiring pros
      -Figure 4: Use of professionals for home improvement, by selected household cohorts, January-September 2004
• Generation X leads the DIY market
• Race/ethnicity differences impact market segmentation
      -Figure 5: Use of professionals for home improvement, by race/ethnicity, January-September 2004
      -Figure 6: Incidence of completed or planned kitchen remodeling, by race/ethnicity, January-September 2004
• Economic performance and levels of disposable income
      -Figure 7: Per capita disposable personal income, 1999-2004
• Growth in housing sales and new home construction levels
      -Figure 8: Sales of homes, new and existing, 1999-2005

• Market nearly doubles from 2000-05
      -Figure 9: Total U.S. retail sales of kitchen renovation, at current and constant prices, 2000-05
      -Figure 10: Graph: Total U.S. retail sales of kitchen renovation, at current and constant prices, 2000-05

• Kitchen renovation: Professional vs. DIY
      -Figure 11: Sales of kitchen renovations, by type, 2003 and 2005
• The professional services market
      -Figure 12: Sales of kitchen renovation by professional services, at current and constant prices, 2000-05
      -Figure 13: Average cost of major kitchen remodeling projects, mid-range vs. upscale, 2002-05
• The DIY market
      -Figure 14: Sales of kitchen renovation by DIY, at current and constant prices, 2000-05

• Introduction
• Home remodeling shows pique consumers’ interest, then retailers and manufacturers direct them to contractors
• Home & Garden Television (HGTV)
• Kitchen Distributors of America (KDA)
• The DIY and wholesale segments
      -Figure 15: Top home improvement centers’ operating statistics, fiscal year 2004
• Home Depot
• EXPO Design Center
• Lowe’s
• Menards
• Sears

• Contractor-driven efforts
• Retailer-driven efforts

• Introduction
• Incidence of home remodeling
      -Figure 16: Incidence of home remodeling, September 2005
      -Figure 17: Incidence of home remodeling, by age, September 2005
      -Figure 18: Incidence of home remodeling, by age, September 2005
      -Figure 19: Incidence of home remodeling, by region, September 2005
• Incidence of hiring professionals for remodeling
      -Figure 20: Incidence of have professional perform home remodeling job, by remodeling project, January-September 2004
• Incidence of DIY and use of professional services in specific kitchen remodeling tasks
      -Figure 21: Who did kitchen remodeling work, January-September 2004
      -Figure 22: Graph: Who did kitchen remodeling work, January-September 2004
• Cabinets
      -Figure 23: Remodeling kitchen cabinets, by age, January-September 2004
      -Figure 24: Remodeling kitchen cabinets, by household income, January-September 2004
      -Figure 25: Remodeling kitchen cabinets, by race/ethnicity, January-September 2004
• Countertops
      -Figure 26: Remodeling kitchen countertops, by household income, January-September 2004
      -Figure 27: Remodeling kitchen countertops, by race/ethnicity, January-September 2004
• Attitudes toward potential remodeling
      -Figure 28: Attitudes toward potential remodeling, agree summary, September 2005
      -Figure 29: Attitudes toward potential remodeling, agree summary, by age, September 2005
      -Figure 30: Attitudes toward potential remodeling, agree summary, by household income, September 2005
      -Figure 31: Attitudes toward potential remodeling, agree summary, by region, September 2005
• Attitudes from previous remodeling
      -Figure 32: Attitudes from previous remodeling, agree summary, September 2005
      -Figure 33: Attitudes from previous remodeling, agree summary, by age, September 2005
      -Figure 34: Attitudes from previous remodeling, agree summary, by household income, September 2005
• Use of professionals for home improvement
      -Figure 35: Use of professionals for home improvement, January-September 2004
      -Figure 36: Use of professionals for home improvement, by age, January-September 2004
      -Figure 37: Use of professionals for home improvement, by household income, January-September 2004
• Purchase of kitchen appliances
      -Figure 38: Purchase of kitchen appliances, by incidence of kitchen remodeling within 12 months, January-September 2004
• Summary

• Future trends
• Interest rates a concern
• The state of the economy and levels of home investment
• Housing values
• Baby Boomers still lead the market, especially at the high-end, but younger generations and Hispanics drive the DIY market
• Market forecast
• Overview
      -Figure 39: Forecast of total sales of kitchen renovation, at current and constant prices, 2005-10
      -Figure 40: Graph: Total sales of kitchen renovation at current prices, 2000-05, and forecast, 2005-10
• Kitchen renovation by professional services
      -Figure 41: Forecast of sales of kitchen renovation by professional services, at current and constant prices, 2005-10
• Kitchen renovation by DIY
      -Figure 42: Forecast of sales of kitchen renovation by DIY, at current and constant prices, 2005-10

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