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Home Furnishings Market Report 2011
Key Note Publications Ltd, Sep 2011, Pages: 101
The UK market for home furnishings was estimated to be worth £3.56bn in 2010, an increase of 0.6% on its value in 2009. For the purposes of this Key Note Market Report, the home furnishings industry can be divided into the sectors of window dressings; bedding; bathroom and kitchen linen; cushions and covers; and table linen. As the home furnishings market is very susceptible to changes in the economy, the recession has inevitably had a key impact on market performance, and is likely to do so for the coming years.
Household penetration levels of home furnishings are high, particularly in the largest sectors of window dressings and bedding, and as such the industry benefits from the growing number of households in the UK. However, as the majority of purchases are due to the need for replacement, in times of economic downturn — when consumers are forced to make cut backs and are less open to making impromptu purchases — the purchase of such items can often be deterred.
The fall in the number of people moving house, which is often considered a catalyst for purchasing home furnishings, also has implications for the soft furnishings market. The recent slump in the housing market has helped consumer expenditure on household textiles to fall. There were only 885,000 property transaction completions in 2010, compared with 1.67 million in 2006, a deterioration of almost half (47%).
The textile industry was once an integral part of the UK economy, with a reputation for quality workmanship and innovative designs, although today the UK has a significant trade deficit in home furnishings, importing goods of a greater value than those it exports in every furnishings sector. The textile industry has always had a reputation for being labour-intensive, and manufacturers are increasingly looking to move facilities to certain countries where production costs are lower.
The increase in value-added tax (VAT) to 20% in early 2011, coupled with increased job insecurity and low consumer confidence, means that home furnishings retailers are operating in a tough climate. As supermarkets attempt to take on the big players, with most now stocking a basic range of good quality, affordable bed, bathroom and kitchen linen, home furnishings specialists are facing even more competition. This summer, the leading department-store chains Debenhams and House of Fraser caused a stir when they launched their summer sales a week earlier than in the previous year, which was expected to cause a chain reaction amongst competing high-street retailers. In the current economic climate, where fewer people are moving house, but an increasing number are investing in smaller home improvements, Key Note estimates that the home furnishings market will grow by 0.5% between 2010 and 2011, and to continue to do so thereafter. Nonetheless, this will be a slow and lengthy process.
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