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Beds, Bedrooms and Upholstered Furniture Market Assessment
Key Note Publications Ltd, Jan 2000
This report specifically reviews developments in the markets for upholstered furniture, beds and bedroom furniture. It covers furniture designed for use in the home and excludes garden furniture and contract furniture (hotels, leisure, offices, hospitals, etc.).
Within Market Assessment's definition, the UK market was estimated to be worth £3.23bn at rsp in 1999. Whilst this was an increase of 14% on 1996, suggesting signs of recovery in the market, growth remains relatively subdued in real terms. However, sales development in the second half of 1999 and early 2000 has accelerated as consumer confidence and spending levels have increased.
In terms of this market, consumers aged below 19 and over 70 can usually be disregarded, since these groups are not major buyers of furniture. The remaining 37.4 million consumers are all potential purchasers of bedroom furniture. Currently, the largest group is the 30 to 39 age range, followed by the 20 to 29 year-olds and the 40 to 49 year-olds. Obviously, different age groups will buy different types of bedroom furniture throughout their purchasing lives and will generally `trade up' to better-quality products as they mature.
Seasonality within the household furniture market can be quite considerable. Sales in the summer months are generally very poor, with winter months showing above-average sales. January/February `sales' offers are common in this sector.
The term `furniture' covers a wide range of products, with sales closely linked to the state of the housing market and the broad economic situation. However, the furniture market is more volatile than the economy as a whole. Most furniture sales are replacement-driven and can be easily postponed in difficult economic periods. Conversely, as consumer confidence and disposable incomes rise, furniture products are major beneficiaries of consumer expenditure.
The level of housemoving also has a major impact, as new furniture is often required soon after relocation. Housemoving activity has increased since 1996, following several difficult years after the boom period of the early 1990s.
In 1999, the value of the upholstered furniture market was estimated at £1.53bn at rsp. Included in this sector are three-piece suites, sofas, armchairs, sofabeds and reclining furniture. Bedroom furniture accounted for around 23% of the market by Market Assessment's definition, with a value estimated at £728m. This sector includes both fitted furniture and freestanding ranges of wardrobes, dressing tables, bedside tables, chests of drawers, etc.
Beds represent a larger market than bedroom furniture, with an estimated retail value of £974m in 1999. This sector is very mature, although it has still managed to increase in value by 13% in real terms since 1990. The key product sectors within the beds market are divans, mattresses and bedsteads, with bedsteads the major growth sector in recent years.
All sectors of the market declined rapidly in the early 1990s as the collapse of consumer confidence affected high-value durables. Having levelled out in 1992 to 1993, the market slowly began to recover during the middle of the decade, with sales increasing to growth levels of around 4% to 5% during the latter part of the 1990s.
In July 2000, Market Assessment commissioned original consumer research from NOP into purchasing intentions with regard to various categories of household furniture. The overall purchasing penetration figures show that consumers are most likely to buy individual items of furniture for the bedroom and have the least intention of buying a sofabed. Two-thirds (66%) of those surveyed do not intend to buy any furniture at all in the next 12 months, which indicates that most consumers are cautious about prospective purchases. It should also be noted that figures for intended purchases tend to be higher than for actual purchases.
These sectors of the furniture market are highly fragmented and, as such, few manufacturers can lay claim to significant market shares. The overall market is not heavily branded, with many manufacturers supplying products both under their own names and under retailer brands. Beds are, perhaps, the exception to this, with some leading brand names, but in general it is furniture and furnishing retailers that generate the stronger consumer profile.
Major suppliers in the upholstered furniture sector include companies such as Christie-Tyler and Walker and Homer (both subsidiaries of Hillsdown Holdings), Wade Furniture Group and Cornwell Parker. Hygena/Schreiber from MFI, Silentnight, Limelight, Hammonds, Bernstein and Ducal dominate bedroom furniture. In the beds sector, Silentnight is the dominant supplier Airsprung, Cauval, Relyon, Slumberland and Myers are other leading manufacturers of beds.
Retailer identity is strong, as indicated above, with MFI commanding a strong identity in the furniture sector, although its recent expansion into upholstery and soft furnishings has now been terminated with a return to the core products of kitchen and bedroom furniture and beds. Ikea is also expanding rapidly, with strong sales in bedroom and upholstered furniture typically appealing to younger householders in the ABC1 groups.
Other leading specialist retailers in this sector include DFS, Courts, Habitat, Allied and Harveys, in addition to the major department and variety stores. DIY multiples are strong in self-assembly bedroom furniture, but not in upholstered furniture and beds.
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