UK Homewares Sector Report summary
April 2022
Period covered: Period covered: 27 February – 02 April 2022
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.
Homewares Sales
Homewares sales edged up by just 00% YoY in March according to Retail Economics. Compared to pre-pandemic levels, Homewares sales rose by a subdued 00% Yo3Ys in March.
Homewares sales are unwinding to more normal levels as Covid-19 restrictions lifted at the end of February, giving the opportunity to spend on services such as hospitality and travel.
Cost concerns as restrictions ease
With more opportunities to spend outside of the home, pent-up demand is being released for services following two years of restrictions. Social spend, which includes spending on restaurants, pubs and hotels, increased by 00% in March compared to February, and was up 59% on last year as restrictions unwind according to Bank of England data. Barclaycard data shows that hospitality and leisure saw particularly strong growth in March, rising by 00% on pre-pandemic levels in 2019.
Although freedom to socialise and travel has improved following the lifting of restrictions, certain structural shifts remain, notably persistent hybrid working across middle-high income professions in industries such as IT, marketing and professional services. This is ultimately seeing more time spent at home than a few years ago.
But optimism around the lifting of Covid restrictions has been tainted by consumer prices surging to a 30-year high at 00% CPI in March – with Homewares sales impacted by aggressive inflation and supply challenges
Across the category, inflation is already approaching that point. Retail inflation among Household Goods is at the highest level since records began at 00% YoY in March (ONS).
As cost pressures intensify, retailers are anticipating further price rises to be passed on to consumers. Bellwether retailer Next expects it will have to raise its homeware and furniture prices in the second half of the year by 00%.
Opportunity in distress
For consumers, rising costs across most essential aspects of living are putting pressure on incomes. Current soft earnings growth and high inflation saw discretionary income for the average household (income left after paying for essentials) dive by 00% in March according to our new monthly Retail Economics-HyperJar Cost of Living Tracker. This is the equivalent of £00 per month less cash available to spend on non-essential items.
Against this, what we’re likely to see is a readjustment in consumer values with greater focus on prices and convenience.
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Confidence plummets to its second-lowest level in March
Source: GfK, Retail Economics analysis
