Costs and availability of raw materials continue to plague Britain’s bedmakers, reports the National Bed Federation (NBF) – but despite the consequent hit to margins, optimism remains higher now than it did this time last year.
According to the NBF's latest barometer of trade report, based on data collected during February and March, 26% of members were more optimistic about the state of trade in Q4 2020, compared to just 17% in Q4 2019.
For the period October to December 2020, sales held up reasonably well in both units and value terms. But, says marketing and membership manager Simon William, costs and availability of raw materials saw the biggest shift, along with the subsequent need for price increases in 2020 compared to 2019.
72% of members reported significant cost increases in Q4 2020, compared to just 8% of members in 2019. Nearly half (47%) of members in Q4 2020 listed the availability of components/materials as the biggest factor in limiting output, compared to only 16% of members in Q4 2019.
Says Simon: “Order books were less of an issue in Q4 2020, with only 28% of members reporting this as a limiting factor, compared to 55% of members in 2019.
“The substantial increase in costs in 2020 has, not surprisingly, negatively affected profit margins, with over half of members reporting a decrease and over 20% of them reporting a significant decrease. To put this in perspective, only 2% of members reported a significant decrease in profits in Q4 2019.”