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Following nearly a decade of economic buoyancy, the past 12 months has seen the dreaded ‘R' word becoming increasingly common in newspaper reports and, if we are to believe everything we read in the press, tough times lie ahead. Talk of recession looming is making everyone jittery and no doubt those of us in the KBB industry are wondering how it will affect our businesses.
At Reginox we believe that our industry will stand up pretty well to the rigours of a slowdown or, as we prefer to think of it, a ‘soft landing'. The overall UK economy is still in pretty good shape; unemployment remains low, interest rates are probably on a downward cycle and people still have money to spend. Big-ticket items such as kitchens and bathrooms should still continue to sell as consumers decide either to stay put and refurb their homes or ‘spruce up' their houses with a view to moving.
The companies that will continue to succeed, weathering any economic fluctuations, are those that work to consolidate their customer base, promote relevant products and understand the adapting needs of the marketplace. Carefully targeted marketing will also become more critical than ever, as focusing on the fewer opportunities that may be out there will require some clever and creative marketing strategies.
Manufacturers will need to ensure that their product portfolios cover all bases. The high end of the market will probably hold up relatively well and the low end will continue to be all about price, but the mid market could suffer and it is, therefore, the companies with the best value/style product that will succeed and prosper.
What could happen if the UK market slows or even shrinks during 2008/09 is that it could spell the end for some of the far eastern companies who simply dump products into the UK and push for high volumes at ridiculously low prices. Foreign importers will seek alternative solutions and this will again present opportunities for more solid and long term suppliers to fill the gaps.
In summary I believe that, whilst tougher times lie ahead, creative and targeted product development and marketing, combined with tight control of overheads, will enable the key players in our industry to come through the next few years in better shape than ever.
For further information, please contact Reginox UK on 01260 280033 or visit http://www.reginox.co.uk/
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