Review of The UK Domestic Furniture Industry

Review of The UK Domestic Furniture Industry

This report provides a collection of statistical data and forecasts on the furniture industry in Britain. It contains information on the value of manufacturers' deliveries for all sectors of this market. The report also covers distribution channels, advertising and trade exhibitions. Major important manufacturers are profiled.

2005 proved to be a poor year for the UK residential furniture industry, with sales declining by 4% and several major companies going into liquidation. The following two years saw some improvements with sales reaching £4950m and £5010m respectively. However, new clouds are at the horizon and sales for 2008 are predicted to decline to a level of about £5005m in 2008 before rebounding again next year.

The AKTRIN Furniture Information Center, in collaboration with Business & Research Associates have released the 2007 edition of the Review of the UK Domestic Furniture Market. This new study presents some interesting findings and conclusions.

2005 proved to be a poor year for the UK residential furniture industry, with sales declining by 4% and several major companies going into liquidation. The following two years saw some improvements with sales reaching £4950m and £5010m respectively. However, new clouds are at the horizon and sales for 2008 are predicted to decline to a level of about £5005m before rebounding again next year.

Few manufacturers improved sales in 2006 or 2007 and margins were again under pressure. The main furniture manufacturing groups are Galiform plc, Nobia Holdings UK Ltd., and Silentnight Holdings Ltd.

Contrary to the manufacturers, the major retailers such as IKEA, DFS, Argos and John Lewis improved their positions in the market. To some extent they had been helped by the previous demise of competitors such as Uno, World of Leather, Kingsway, Landmark and more recently Courts, Allders, Furnitureland, and Durham Express.
Sales of all product groups have grown in absolute terms in the period from 2006 to 2007, with kitchen furniture showing most growth and bedroom furniture showing the least. Sales of home office furniture have grown significantly in recent years, albeit from a small base. Sales of upholstered furniture are expected to reach £1640m in 2008, representing 33% of total market sales. Sales of kitchen furniture are forecast to reach £1130m in 2008, accounting for 23% of the market.

In regards to domestic furniture (other than kitchen and upholstered furniture), multiple furnishing outlets currently account for around 40% of total sales in value terms, whilst independent outlets account for around 21%.

As far as kitchen furniture is concerned, specialist kitchen furniture outlets are the main distributors with 39% of the market in value terms; within that sector independents account for 32% of the market, whilst multiples account for 7%. Builders’ and plumbers’ merchants account for around 15% of the market in value terms, but a much larger share in volume termsThe Howden group is the largest distributor.

Multiple furnishing stores remain the major outlets for upholstered furniture with 48% of total sales, compared with independent outlets with 17% of the total market. Within the multiple furnishing stores category specialist upholstery outlets account for around 26% of total sales.

Foreign suppliers have continued to increase their share of the UK market. It is estimated that imports of domestic furniture reached £1682.7m in 2006. Imports currently account for 34% of the total market. The penetration rate for imports varies considerably between different product groups, reaching 54% for dining and living room furniture and for bedroom furniture, but only 10% for kitchen furniture. Imports from outside the EEC account for well over 50% of total imports.

1. INTRODUCTION

1.1 Background to the research
1.2 Terms of reference
1.3 Methodology
1.4 Research parameters

2. SUMMARY OF FINDINGS

3. THE UK ECONOMY

3.1 General economic appraisal
3.2 Consumers’ expenditure on furniture

4. MARKET SIZE AND STRUCTURE

4.1 Introduction
4.2 Past and present market size
4.3 The market by product group
4.4 Major factors influencing the market
4.5 Geographical distribution of the market
4.6 The market by distribution outlet
4.7 Product trends

5. THE COMPETITION FROM IMPORTED FURNITURE

5.1 Analysis of import penetration

6. ADVERTISING AND SALES PROMOTION

6.1 Direct advertising
6.2 Exhibitions and display
6.3 Sales promotion

7. MAJOR MANUFACTURERS AND SUPPLIERS

7.1 The market leaders
7.2 Other important manufacturers

8. THE FUTURE FOR DOMESTIC FURNITURE

8.1 The outlook for the UK economy
8.2 Market forecasts


APPENDICES
Map 1 - Standard Regions in the UK
I - Boundaries of Standard Regions
II - Summary of interviews carried out
III - Definition of product groups within the domestic furniture industry



TABLES AND CHARTS PRESENTED IN THIS REPORT



Chart 1 - Share of total sales of domestic furniture by product group
Chart 2 - Total sales of domestic furniture
Chart 3 - Share of total sales of self-assembly furniture by product group

Table 1 - Total gross disposable income in the UK
Table 2 - Real personal disposable income in the UK
Table 3 - Total consumers’ expenditure in the UK
Table 4 - Total value of retail sales of household goods retailers in the UK
Table 5 - Total sales of domestic furniture by product group
Table 6 - Share of total sales of domestic furniture held by product group
Table 7 - Indices of domestic furniture sales and producer prices for selected
product groups
Table 8 - Indices of domestic furniture sales and producer prices for selected product groups
Table 9 - Indices of domestic furniture sales volume by product group
Table 10 - Total sales of domestic furniture by selected product type
Table 11 - Total sales of domestic furniture by selected product type
Table 12 - Geographical distribution of sales of domestic furniture and location
of households in the UK
Table 13 - Total sales of pine furniture by product type
Table 14 - Total sales of leather upholstery
Table 15 - Total sales of kitchen furniture by distribution outlet
Table 16 - Total sales of upholstered furniture by distribution outlet
Table 17 - Total sales of domestic furniture by distribution outlet
Table 18 - Total sales of self-assembly furniture by product group and proportion
of total market
Table 19 - Total imports and exports of domestic furniture
Table 20 - Total imports and exports of domestic furniture by product group
Table 21 - Total direct advertising expenditure in the domestic furniture industry
Table 22 - Rate of import penetration by sector
Table 23 - Total direct advertising expenditure in the domestic furniture industry
Table 24 - Direct advertising expenditure compared with total sales of domestic
furniture
Table 25 - Proportion of total direct advertising expenditure allocated to individual
product groups
Table 26 - Forecasts for the UK economy
Table 27 - Forecasts by the Treasury
Table 28 - Estimated future size of the UK domestic furniture
Table 29 - Estimated future size of the UK domestic furniture market by product group