UK Furniture & Flooring Sector Report summary
August 2023
Period covered: Period covered: 02 – 29 July 2023
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 sales
Furniture & Flooring sales fell by xx% YoY in July, according to the Retail Economics Retail Sales Index.
Retail Economics estimates Furniture & Flooring inflation was in the region of xx% in July.
Macroeconomic challenges remain
Furniture & Flooring sales struggled in July as rising interest rates and sticky inflation curbed demand for big-ticket purchases.
Headline inflation eased to a 17-month low of 6.8% in July, but remained slightly ahead of economists’ expectations, while core inflation remained unchanged at 6.9% for the second consecutive month.
The Bank of England raised the interest rate to 5% in June, which was followed by a further rise to 5.25% in August, putting financial pressure on mortgagers and borrowers.
After improving for the first six months of the year, GfK’s consumer confidence index suddenly fell six points to -30 in July as a result.
Importantly, the Major Purchase index fell by a steeper seven points to -32 in the month, pointing to waning demand for larger purchases, such as Furniture & Flooring items.
Consumers seek value and familiarity
July saw UK house prices fall 2.4% YoY, according to Halifax.
On a monthly basis, house prices experienced a more modest decline of 0.3%. Prices are little changed over the last six months, pointing to resilience in the market driven by strong wage growth and easing inflation.
However, persistent interest rate rises continue to erode buyer demand,
Some households are choosing to spruce up their home environments with new furniture purchases as an alternative to moving, while others are adjusting to increasing borrowing costs by seeking smaller, more affordable properties.
But this has been unable to offset the impact of Furniture & Flooring sales as part of house moves or refurbishments being subdued, as households look to delay non-essential spending.
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Housing market subdued
Source: RICS
