UK Furniture & Flooring Sector Report summary
July 2023
Period covered: Period covered: 28 May – 1 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 increased 00% YoY in June, according to the Retail Economics Retail Sales Index.
ONS data shows the wider Households Goods category faced 00% YoY shop price inflation in the month, pointing to a narrowing gap between sales values and volumes.
Housing market subdued
June saw UK house prices experience the sharpest annual decline since 2011 (-2.6% YoY, Halifax).
This reflects the effect of both strong price growth in the summer of 2022 and the effects of persistent interest rate rises on buyer demand.
Falling buyer confidence has seen indicators for buyer enquiries, sales expectations and price expectations, all of which had steadily improved over the course of the year, fell back towards the lows seen in Q4 2022 (RICS).
Additionally, the rental market is facing low inventory levels, with a net balance of +53% of respondents foreseeing rental prices increasing as landlords pass on greater housing costs while demand remains strong.
This is putting pressure on future Furniture & Flooring sales as part of house moves.
Consumers seek value and familiarity
This is seeing households make more considered purchased focused on price. This includes delaying spending until sales periods, with summer promotions enticing sales in June as shopper values evolve.
This has seen a concentration in demand to value and legacy retailers, who typically offer keen deals.
Legacy retailer DFS achieved a record market share of 38% in the year to 25 June 2023 despite seeing a 4% YoY fall in sales in the same period.
Sector outlook
Retail Economics forecasts Furniture & Flooring sales to record growth of 00% YoY in 2023, with sales stalling at just under £00bn. This follows 00% growth in 2022.
Taking into account high single-digit inflation levels across the category, this implies a 00000000000 in sales volumes of c.00% in 2023.
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Almost two thirds (65%) of households intend to cut back across the majority of their spending this financial year
Source: Retail Economics, Grant Thornton
