Report Summary

Period covered 05 April – 02 May 2026

3 minute read

Note: This report summary is one or two months behind the current month as standard reporting practice. The content is indicative only and incomplete with certain data undisclosed. Become a member to access this data or take out a free 30 day membership trial now.

Furniture & Flooring – Retail Economics Index

Furniture and flooring sales weakened materially in April, falling xx% YoY, a sharp reversal from the xx% growth recorded a year earlier.

However, the headline decline overstates the underlying weakness due to Easter timing distortions between March and April. Much of the seasonal spending that would typically support April shifted into March this year, as Easter fell earlier in the trading calendar.

A combined March/April view gives a better indication of underlying momentum. Across the two-month period, furniture and flooring sales fell xx%, compared with xx% growth a year earlier, confirming the category remains under pressure.

Key trading themes and drivers

Easter timing was a major factor behind April’s headline decline. Seasonal spending linked to home entertaining, spring refresh projects and promotions shifted earlier this year, leaving April facing a tougher comparison.

Consumer caution around larger purchases became more pronounced in April. Furniture and flooring remain highly exposed to weaker confidence, particularly as expectations for lower borrowing costs faded and households reassessed budgets against higher fuel and energy costs. The GfK Major Purchase Index remained subdued, reflecting continued caution around discretionary purchases that are frequently delayed rather than cancelled.

Retailer commentary reflects weaker trading conditions. DFS entered 2026 in better shape than expected, with earlier updates showing improving order intake and profitability. However, those figures pre-date the deterioration in trading through March and April, when willingness to commit to higher-value purchases weakened as financing costs remained elevated.

Dunelm also reported weaker demand as the quarter progressed, alongside greater reliance on promotions and discounted lines. While its broader mix of lower-ticket homewares offers some insulation, similar behaviour is more evident in furniture and flooring, where purchases are easier to postpone.

Housing activity remains a drag on the category, with higher mortgage costs and fading expectations for rate cuts weighing on confidence and constraining transaction volumes in Q2.

Macroeconomic backdrop

The economic backdrop became more challenging during April, particularly for sectors reliant on major discretionary purchases. Rising fuel and energy prices linked to conflict in the Middle East added renewed inflation pressure just as households had expected conditions to improve.

This shift disproportionately impacts furniture and flooring, where purchases are often financed, deferred or closely linked to confidence in household finances. As expectations for near-term interest rate cuts faded, mortgage pricing firmed and borrowing costs remained elevated, reducing willingness to commit to larger purchases.

Confidence around major purchases remained subdued, with households continuing to prioritise savings and essential spending. This rise in precautionary behaviour is especially relevant for furniture and flooring, where spending can be delayed without immediate disruption.

The housing market continues to weigh on demand. Higher mortgage rates are reducing affordability and transaction confidence, limiting spending linked to home moves, renovations and furnishing activity.

Softer wage growth and weaker hiring demand are limiting the extent to which real income gains support larger discretionary purchases, leaving the sector exposed should inflationary pressures intensify further through the summer.

Outlook

April’s headline decline should be viewed through the lens of Easter timing, although the broader direction of travel for furniture and flooring remains weak. The combined March-April figures show demand was weaker than a year ago even after adjusting for calendar effects, reinforcing the view that caution around larger purchases has intensified.

Conditions are unlikely to improve materially in the near term. Rising energy costs and renewed inflation concerns have reduced confidence that interest rates will fall quickly, keeping borrowing costs elevated and weighing on housing activity. Any further slowdown in mortgage approvals or housing transactions would add pressure to the category through Q2.Consumer spending patterns also remain defensive.

Households continue to prioritise essential spending and value, while larger discretionary purchases are taking longer to convert and are increasingly dependent on promotions or financing offers. This leaves retailers exposed to weaker demand where pricing power is limited.

For the category overall, conditions are likely to remain weak through Q2. Higher borrowing costs continue to weigh on housing-related demand and larger discretionary purchases, while inflation concerns linked to the Middle East conflict risk placing further pressure on household budgets. This leaves limited scope for a sustained improvement in demand in the near term.

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Consumer confidence edges up in May