Report Summary

Period covered: 27 August - 30 September 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 September, according to the Retail Economics Retail Sales Index.

ONS data shows the wider Households Goods category faced xx% YoY shop price inflation in the month, pointing to declining sales volumes.

Sales volumes in the Household Goods category fell by xx% YoY in September (ONS).

Macroeconomic challenges remain

September saw Furniture & Flooring sales struggle against a tough macroeconomic backdrop.

Although consumer confidence increased four points to -21 in September, this was offset by a sharp decline to -30 in October, the sharpest month-on-month decline since December 1994 (GfK).

This erased the gradual increases in confidence recorded over the summer months and points to persistent negative effects of rising petrol prices, higher mortgage and rental costs, and a slowing job market on consumer sentiment.

Amid such cost-of-living pressures, household goods remain low on households’ spending priorities, marking a sharp contrast with the growth experienced by the sector over the pandemic.

Spending on larger and big-ticket household goods products, such as furniture and flooring are at particular risk of cut back, as consumers prioritise small-ticket and essential household spending.

Indeed, GfK’s Major Purchase Index fell by a staggering fourteen points to -34 in October, revealing widespread reluctance to spend on major home improvements.

Consumers seek value and familiarity 

The UK housing market, a key driver of Furniture & Flooring sales, remained under considerable pressure in September.

House prices fell 4.7% YoY in the month (Halifax), while indicators for buyer enquiries, agreed sales and new instructions are still firmly in negative territory (RICS).

This comes as the Bank of England held interest rates at 5.25% in September, which follows 14 consecutive increases.

The decision provided little hope for near-term recovery as market expectations point to sustained high interest rates in the coming months.

Following a decade of ultra-low and stable interest rates, prospective buyers are delaying house moves where possible until there’s greater clarity on the onward trajectory of rates.

Indeed, a recent survey by Houzz found that xx% of respondents preferred to stay put in their current homes than consider moving, primarily for financial reasons.

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Housing market cooling