CHICAGO — Today’s kitchen and bath market may be challenging to navigate, but most design firms are apparently finding ways to cope.
Indeed, the majority of company owners surveyed by Kitchen & Bath Design News report that they’ve already embraced an array of strategies aimed at mitigating rising business costs, recession fears, changes in trade policy, profit-margin pressures, labor shortages and other 2025 headwinds (see related Editorial).
According to KBDN’s survey findings, business strategies – especially at the mid- to high-end of the market – generally consist of passing product and labor cost increases on to clients by charging more for the kitchens and baths companies design and sell. Specifically, roughly one-third of survey respondents report that any profit gains they experience in 2025 will likely result from selling higher-margin projects, while equal numbers attribute expected profit gains to selling more add-ons, charging design fees, improved marketing/advertising initiatives, and/or joining a buying group to obtain bulk pricing on key products.
To help tackle rising costs, kitchen/bath design firms say they’re getting more resourceful with respect to product sourcing, while attempting to achieve other business efficiencies. Nearly a quarter of those surveyed by KBDN say they expect to absorb anticipated cost increases, while 20% note that they’ve advance-ordered and stockpiled key products and materials in anticipation of price hikes, and about one in 10 report that they plan to narrow their product choices as tariff-related price hikes come into effect.
Others tell KBDN that, in order to remain competitive, they’re lowering their markup on certain projects, diversifying project types to keep pipelines filled, and experimenting with fixed-fee design rates over typical hourly rates. They’re also increasingly working with contractors who employ reliable sub-contractors, and focusing on building more communicative, solid relationships with contractors, business owners report.