Press Release Summary = The UK household furniture market was valued at £8.16bn in 2003, having shown strong growth in most years since 1999. However, sales fell sharply in 2003, reflecting a general slowdown in consumer spending, which was partly an adverse reaction to the war in Iraq and to global economic and geopolitical uncertainty.
Press Release Body = Household Furniture - Market Report
The UK household furniture market was valued at £8.16bn in 2003, having shown strong growth in most years since 1999. However, sales fell sharply in 2003, reflecting a general slowdown in consumer spending, which was partly an adverse reaction to the war in Iraq and to global economic and geopolitical uncertainty. In addition, the furniture market has been the subject of fierce competitive pressures, which have led many retailers to reduce prices, thereby undermining the total value of sales. In particular, the entry into the market of retailers such as Argos and the growing trend towards sourcing products from low-cost producers in China are driving down prices, a development that is doubtless delighting consumers but causing distress to some mainstream retailers.
Prior to 2003, a number of positive factors had been driving the market forward. The booming housing market undoubtedly encouraged many consumers to withdraw equity from their homes to fund large-ticket purchases such as sofas. The proliferation of home makeover and design programmes, also driven by the property boom, has had a huge impact on the market, encouraging consumers to purchase new furniture in order to change `the look\' of a room, rather than because their existing furniture has worn out and needs replacing. The interest has encouraged consumers to become more adventurous in their purchases and to spend more on home furnishing. The growing number of people who are working at home - either full or part time - is also helping to drive sales of space-saving, multifunctional and office furniture.
Living room furniture remains the dominant sector of the market, reflecting the fact that the living room is often the focus of activity in the home and where visitors are entertained. Bedroom furniture has been the fastest-growing of the main sectors over the review period (1999 to 2003), having benefited from the availability of a wide range of furniture at various price points and increasing awareness among consumers about the importance of sleep. Kitchen furniture is also a key sector, with sales being driven largely by demand for replacement furniture. The performance of the economy has a stronger influence on sales in this sector, as people tend to delay upgrading their kitchens - usually, a costly exercise - in times of economic hardship. The decline in formal dining and the fact that fewer homes have a dedicated dining space is undermining sales of dining room furniture. The `other furniture\' sector has outperformed the total market since 1999, mainly as a result of increased sales of home-office furniture.
The market has remained in the doldrums in 2004, reflecting intense competition among retailers and suppliers, and the impact of the slowdown in the housing market, which began in late summer 2004. Some growth is expected in 2005, as prices stabilise, although the housing market slowdown is expected to continue. However, Key Note believes that relatively strong economic growth and continued low borrowing costs (in historical terms) rule out a housing market crash and forecasts that the housing market will pick up again in 2007 and 2008, driven by population growth, pent-up demand among first-time buyers and a benign economic background, which will help to accelerate growth in the household furniture market.
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2022
