Middle-class homeowners in the UK are postponing their kitchen renovation plans as fears grow over possible tax rises in the upcoming October budget.
The possibility of higher taxes, flagged by shadow chancellor Rachel Reeves, has led to a marked drop in consumer confidence, according to kitchen retailers.
Jamie Everett, co-founder of bespoke kitchen manufacturer Naked Kitchens, noted a sharp drop in orders after a strong start to the year. He said: “In September it’s like someone has just turned off the tap. The budget is the big obstacle at the moment.”
Many customers are taking a wait-and-see approach because they are afraid that tax increases could impact their disposable income. Kitchen retailers such as Thomas Matthew in Dorset report that some customers have explicitly indicated that they are waiting for the Budget before placing orders.
The uncertainty has had a knock-on effect on consumer confidence in the wider home improvement sector. According to GfK’s consumer confidence index, there has been a notable decline in sentiment, which fell by seven points to -20 in September, indicating that households are feeling less confident about their finances.
Retailers are also grappling with the aftershocks of supply chain disruptions and rising costs in recent years. Vince Gunn, CEO of Harvey Jones, noted that the positioning of the Budget has further diluted consumer confidence, despite the relatively positive economic outlook earlier this year.
Nick Glynne, CEO of Buy It Direct Group, which sells major household items such as appliances and furniture, echoed these concerns, citing a 9% drop in website traffic after public discussions about possible tax increases. “We rely on excess cash,” Glynne said, highlighting the impact fiscal uncertainty is having on expensive purchases such as kitchens.
As the sector awaits clarity in the autumn budget, kitchen retailers remain cautious, with many expecting a tough market to last for up to six months if significant tax increases are implemented. The potential pressure on consumer spending could further exacerbate challenges for companies already in dire straits after years of economic turbulence.