Report Summary

Period covered: 01 Jan 2021 – 31 Jan 2021

Note: Reporting periods are either one month or two months behind the current month as standard.

Lockdown hits Homewares

• Homewares sales fell by 6.3% year-on-year in January – its weakest performance since May 2020.
• Online sales of household goods surged by 113% year-on-year in January.
• While the latest lockdown weighs on the sector, homewares demand has generally held up well during the pandemic. Consumers are prioritising home-related purchases as they spend more time at home.
• Dunelm enjoyed a boost to sales in its interim results: “events of the last year have created more ‘home lovers’.” They saw 23% revenue growth, with online sales soaring 111% for the half-year period ending Boxing day.

UK Retail Market Trends

• The announcement of a third national lockdown on 4 January, effective the following day, saw the closure of non-essential retailers once more.
• A rapid rise in the number of cases caused by the newly identified Covid-19 strain caused anxiety amongst some shoppers.
• Retail sales fell by 1.7% year-on-year in January, according to the Retail Economics (value, non-seasonally adjusted, ex. Fuel).
• However, there was a significant shift towards online as consumers reverted seamlessly to lockdown shopping behaviour.

Housing Market Losing Steam

• The housing market is starting to lose momentum, as the deadline for the Stamp Duty holiday nears.
• January’s RICS Residential Market Survey shows a clear reversal in market activity, with indicators for enquiries, agreed sales and new instructions all turning negative for the first time since May 2020.
• The government is considering a short extension to the holiday to allow more time for deals to be completed. This would provide upside support to homewares sales in the months ahead as consumers purchase furnishings for new homes.

2021 Outlook

• Retail Economics forecasts Homewares to grow by 2.7% year-on-year in 2021, with sales reaching close to £13.1bn.
• Online channels will grow at a slower pace than 2020, but there has still been a significant step change in the proportion of sales occurring online.
• Our research shows that almost two in five consumers (38%) think that their lives will return to normal by June 2021. This rises to 55% by September 2021 and 65% by December 2021.
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Homewares under pressure again after seven months of growth