We have done our best to keep you updated with regards to the current supply chain and will continue to do so. I am speaking with business leaders at suppliers, customers and competitors weekly, in the interest of keeping abreast of how the rapidly changing market shifts. I wanted to share some of my findings and conclusions with you to ensure you are best placed to plan for your business over the coming months:

 

Supply Chain

The supply chain across raw materials is becoming increasingly challenging with shortages on all timber, steel and chemicals/adhesives utilised in various stages of the kitchen and component manufacturing process.

We are continuing to work on a strategy that supports the growth of the business but primarily prevents disruption to our customers. We have increased and maintained stock levels since I last wrote to you. These were already increased due to concerns over Brexit stock and also due to the shortages caused last year due to the pandemic. As we prepare for peak season, our stocks are at their highest levels in the history of the business, and we have increased our forecasts with suppliers on the basis that we receive a preferential supply. There are several key components required in kitchens and we have put a minimum of 6 months stock on these items in the event that supply becomes restricted later in the year.

 

One area I would like to bring to your attention is the availability of MFC in the full range of colours we currently offer. As a supplier that offers a choice of 60 carcase colours, when stock availability becomes difficult then we are reliant on what we can store in our own warehouse. You will all remember how difficult supply became last year, with lead-times being rolled out as a result of demand for MFC rocketing, combined with all capacity being utilised at MFC plants throughout Europe. One thing that we will be implementing this year will be a focus on the most popular colours with priority made to ensure these products are available on standard lead times, with other, slower-moving, colours being available on longer lead times. We will be communicating full details of this with you as we run into peak trading and give you options to ensure you are in the best position possible to offer your customer the kitchen of their choice. At this time there are no restrictions on carcase/door colours or lead times.

 

I am sure you have all seen communications from worktop distributors and appliance manufacturers/distributors, regarding their belief that disruption to the marketplace will continue well into Q3/Q4 this year. I urge you to plan purchases as far in advance as possible and recommend you to ask your customers to take deliveries of items that are in short supply, in advance if they are able to store them. The shortage in materials is causing huge pricing disruption which whilst expected, when demand outstrips supply, is unwelcome.

 

Pricing Volatility

The consumer market is currently shielded from the scale of increases on some of the aforementioned commodities (although I know it doesn’t feel like it!). For example, the cost of MDF will continue to increase with worldwide costs expected to surge again in August at which stage the price will have increased by 100% since January this year. We have previously communicated details of a price increase which comes into effect at the end of this month. I am sorry to say that we will be seeing further increases from door manufacturers in the coming months as they see their material costs dramatically increase; The saving grace being we are seeing and hearing about double-digit industry wide increases amongst national retailers, so the market price is shifting rather than just the cost price for independents retailers.

 

Product/Manufacturer - Increase - Date effective

• System 6 Kitchens Products - 3% - 1st August 2021

• Uform - 5% - 1st September 2021

• PWS - 4% - 1st September 2021

• Kessebohmer - 7.5% - 1st September 2021

• Sliding Wardrobes - 15% - 1st August 2021 

• Burbidge - 5% - 1st Sepetember 2021

In an attempt to offer you stability and a clear pricing strategy for the remainder of the year then we have outlined the above with as much notice as possible and can confirm the following details regarding the placing of orders and last delivery dates for protected pricing:

 

Price Increase Date - Order to be received by S6K - Order to be delivered no later than

01/08/2021 - 17:00 on 30/07/2021 - 01/11/2021

01/09/2021 - 17:00 on 31/08/2021 - 20/12/2021 

Please note that in order to ensure these prices are protected we will be buying all associated products at the time of order and as such, changes to orders will result in restocking charges where applicable. These will be kept to a minimum and only passed on at cost. Some items such as painted items cannot be returned and would be chargeable. We recommend placing orders that are finalised and checked. For those that cannot be completed, we suggest you plan these as if they are at the higher price.

 

It is my absolute intention for us to be able to hold these prices for the rest of the year, but with some key suppliers unable to give me pricing that is secured beyond one month in advance, it is impossible for me to commit to this for certain.

 

We greatly appreciate your continued business and support through this challenging time. If you have any further questions or concerns regarding this price increase, please do not hesitate to contact me.

 

Sincerely,

 

Tom Dalton

Sales Director