Report Summary

Period covered: 24 November – 28 December 2024

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 & Flooring faced a challenging year, with a xx% year-on-year decline for 2024, reflecting ongoing economic pressures.

December showed a notable improvement, with the sector’s decline narrowing to xx%, compared to a steeper xx% drop in November. Several factors contributed to this decline:

Festive boost: The festive season helped reduce the Furniture and Flooring sector's decline, improving December's performance compared to November's steep drop.

Weather: Stormy weather in late November shifted consideration towards home comforts.

Deflation across home goods: Declining prices across Household Goods underlines the value-led environment the category is in to entice sales.

Cost of living pressure: High living costs, especially for essentials, has restrained discretionary spending, impacting budgets for Furniture & Flooring.

Festive boost

The festive season helped reduce the Furniture & Flooring sector's decline, improving from a xx% drop in November to a xx% decline in December. The seasonal boost, driven by events like Black Friday, Christmas and Boxing Day sales, underlined a promotional environment as consumers considered refreshing their living spaces to host gatherings.

Weather disruption

Stormy weather in late November and early December shifted consumer attention towards indoor comfort, particularly alongside the run-up to Christmas gatherings. However, warmer-than-average temperatures later in December, peaking at xx°C on Christmas eve (Met Office), also encouraged footfall.

Retail insolvencies remain under strain

Furniture & Flooring insolvencies fell by xx% YoY in 2024 but remained more than double pre-pandemic levels (The Furnishing Report). This reflects lingering challenges in the operating environment, including tight margins and cautious consumer spending.

Cost of living pressure

The cost of living remains a top concern for consumers as households continue to adjust to elevated price levels. While the worst of the cost-of-living crisis is likely to be behind us, the road to recovery is uneven across households.

Affluent households are seeing a faster recovery in discretionary budgets compared to lower affluence groups, whose discretionary income remains below pre-pandemic levels (Retail Economics Households Income Tracker).

Inflation uncertainty

Household Goods prices remained in deflation in December as retailers cut costs to entice sales. Across the wider consumer basket, however, inflation remains above-target at xx% in the month.

Rising Rents and Household Resilience

Housing costs are a critical concern for consumers. Rents now consume xx% of gross income, up £xx since 2021 (Zoopla), with average private rents increasing by xx% in the 12 months to December (ONS), slightly down from xx% in November but still near record levels.

While financial pressures from rising rents and house prices persist, financial resilience is being supported by improved savings buffers and lower consumer credit reliance.

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UK rents annual inflation eased, while house price annual inflation rose