Executive Summary

Retail sales of kitchenware, as covered by this Key Note report, were valued at £702.5m in 1999 in a virtually static market. The market has seen stilted growth in value largely thanks to some drastic discounting, which shows no sign of disappearing, and a sharp increase in the levels and quality of reasonably priced imported kitchenware.

The UK still has a favourable trade balance but it is one that is rapidly shrinking as imports increase and exports decrease. That the nation still has a positive balance is attributable to the ceramics sector but this is an industry in which future prospects for overseas trade look bleak indeed.

Both the manufacturing and retailing of kitchenware products are fiercely competitive and there has been some consolidation seen within the industry recently, such as Oneida UK Ltd's acquisition of Viners of Sheffield Ltd and the acquisition of Plysu PLC by Nampak Holdings (UK) PLC. On the retail side, the chain of Cargo announced the closure of ten of its worst performing stores in July 2000. Meanwhile, an increasing number of major retailers prefer to rationalise their supply base by placing larger orders with fewer suppliers. This has inspired a number of brand acquisitions as manufacturers look to increase their product offering with already-established brands.

Changes in lifestyle have brought about major changes in eating habits. These changes include an increase in the number of working women and a resultant decrease in the number of housewives with the time, skills or inclination to practise much home cooking and baking. Further to this, there are now more single households than ever thanks to longevity, an increasing divorce rate and the trend towards staying single, if only until an older age. This will mean some duplication in demand for kitchenware, since penetration levels of most types of kitchenware are relatively high. On the downside, however, it is likely that single householders will use more convenience foods that need little or no kitchenware in their preparation.

The kitchenware market is one that, to a great extent, is fashion-led and consumers are generally more design conscious than ever. This means that some items are bought as much for their aesthetic appeal as necessity and also encourages more frequent replacement and colour co-ordination. Some sectors of the market suffer a distinctly old-fashioned image, notably traditional bakeware, preserving pans and pressure cookers while others, such as steamers and woks, are much more popular. The proliferation of celebrity chef programmes with accompanying books indubitably encourage keener cooks to experiment and be more adventurous in terms of both cuisine and kitchenware.

Key Note anticipates the value of the kitchenware market in its entirety to reach £709m in 2000, its growth hampered by increasing levels of cheap imports and by continuing discounting. ASDA Group Ltd, since its takeover by the world's largest retailer, has made no secret of the fact that it intends to take on competitors with continuing price cuts and, while such discounting increases the volume of the market, it does little for its retail value. The entire market is forecast to reach a value of some £742m by 2004, representing a growth of 4.7% over the 5-year period from 2000 to 2004.

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