Table of Contents
Overview
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- Key issues covered in this Report
- COVID-19: Market context
- Economic and other assumptions
- Products covered in this Report
Executive Summary
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- Impact of COVID-19 on living and dining room furniture
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- Figure 1: Short-, medium- and long-term impact of COVID-19 on living and dining room furniture, October 2020
- Market size
- Retail sales are expected to fall by nearly 18% during 2020 as COVID-19 impacts on the sector
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- Figure 2: Market size and forecast for living and dining room furniture, 2015-25
- Upholstery markets dominates sales although is facing increase competition
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- Figure 3: Segmentation of the living and dining room furniture market, by value, at current prices, 2019
- Online is placing increased pressure on established retailers
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- Figure 4: Estimated channels of distribution for living and dining room furniture, 2015 and 2019
- An underperforming property market has not helped the sector since 2016
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- Figure 5: Quarterly residential property transactions of £40,000 or above, Q1 2015-Q2 2020
- Companies and brands
- While fragmented, IKEA and DFS account for well over a fifth of retail sales
- Strategies to minimise costs are likely to accelerate post COVID-19
- Improving the customer experience is an area of innovation for those selling online
- COVID-19 resulted in a collapse in advertising and promotional spend
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- Figure 6: Total above-the-line, online display and direct mail advertising expenditure on living and dining room furniture, 2019 and 2020 (January to July)
- The consumer
- Age is a factor when it comes to living space layout
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- Figure 7: Type of living room, August 2020
- Dining rooms are seen more as part of a living room
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- Figure 8: Type of dining room, August 2020
- Young families represent an important target market
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- Figure 9: Expenditure on living and dining room furniture, august 2020
- Those who have moved within the last 12 months offer opportunities for high-ticket items
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- Figure 10: Living and dining room furniture purchases (by product), august 2020
- Younger adults see living space as having a variety of uses
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- Figure 11: Use of living space, august 2020
- Young families are a key group of potential purchasers
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- Figure 12: Future purchase intentions, august 2020
- Online offers an opportunity for value retailers
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- Figure 13: Attitudes towards living and dining room furniture, august 2020
Issues and Insights
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- COVID-19 is likely to re-set the retail environment
- Broadening demands from living space signals more help for customers
- Specific groups should be prioritised in picking up potentially difficult sales
The Market – Key Takeaways
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- COVID-19 is forecast to result in a major contraction in retail sales
- Home office furniture is a growing market
- Online is proving increasingly popular with consumers
- Housing stimulus and COVID-19 offers short-term opportunities
Market Size and Forecast
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- Retail and furniture sales both suffer from COVID-19
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- Figure 14: Short-, medium- and long-term impact of COVID-19 on living and dining room furniture, October 2020
- Lockdown
- Re-emergence
- Recovery
- COVID-19 is expected to lead to a sharp contraction in sales
- Products associated with home working and relaxation will benefit …
- … while high ticket items are likely to suffer
- Brexit uncertainty remains a future threat
- Consumer expenditure expected to fall nearly 18% in 2020
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- Figure 15: Market size and forecast for living and dining room furniture, 2015-25
- Figure 16: Market size and forecast for the living and dining room furniture market, 2015-25
- Revenues forecast to rebound in 2021
- Home office is likely to benefit from working from home
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- Figure 17: Segmentation of the living and dining room furniture market, percentage split, at current prices, 2020-25
- COVID-19 expected to emphasise need for value
- Market drivers and assumptions
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- Figure 18: Key drivers affecting Mintel’s market forecast, 2015-25 (prepared on 7 September 2020)
- Learnings from the last recession
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- Figure 19: the living and dining room furniture market, by value, 2007-12
- Forecast methodology
Market Segmentation
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- Over half of consumer expenditure is directed towards upholstery
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- Figure 20: Segmentation of the living and dining room furniture market, by value, at current prices, 2019
- Upholstery purchases dominate the market
- Dining sector in long-term decline
- Home office and other living market benefit from growth
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- Figure 21: Segmentation of the living and dining room furniture market, by value, at current prices, 2015-20
- Discounting and sluggish demand hits upholstery market
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- Figure 22: Segmentation of the living and dining room furniture market, by value, at current prices, 2015 and 2019
Channels to Market
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- Category specialists and general furniture retailers see share of sales fall
- High Street sees mixed success …
- … as online increasingly strengthens presence
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- Figure 23: Estimated channels of distribution for living and dining room furniture, 2015 and 2019
Market Drivers
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- GDP growth has been slowing since 2014
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- Figure 24: Real GDP (actual and forecast), 2010-24
- COVID-19 hits housing transactions
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- Figure 25: Quarterly residential property transactions of £40,000 or above, Q1 2015-Q2 2020
- Number of households up 6.8% over the past decade
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- Figure 26: Number of UK households, 2009-19
- Just under a fifth of households rent from private landlords …
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- Figure 27: England housing, by tenure, 2009 and 2019
- … while a fifth also live in flats and apartments
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- Figure 28: Type of dwelling lived in, August 2020
- Consumer confidence dented by COVID-19 pandemic
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- Figure 29: Consumer financial confidence, January 2015-July 2020
- Future expenditure plans appear uncertain
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- Figure 30: The financial activity index, January 2015-July 2020
- Consumer credit lending hit by COVID-19
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- Figure 31: Consumer credit outstanding (excluding student loans), March 2010 -June 2020
- Market needs to respond to an ageing population
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- Figure 32: Trends in the age structure of the UK population, 2015-25
Companies and Brands – Key Takeaways
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- IKEA and specialist DFS dominate the market
- A number of retailers have faced difficulties since 2019
- Strategies focused away from cost are proving popular
- Bringing reality to life is proving popular
- Promotional expenditure softens as market suffers slowdown
Market Share
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- IKEA and DFS Furniture dominate the market
- Other specialists see mixed performance
- Department stores suffer while general homeware fails to make progress
- Wayfair and Amazon lead online charge
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- Figure 33: Estimated market shares of the living and dining room furniture market, 2015, 2017 and 2019
Retailer Analysis
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- Mixed fortunes for retailers of living and dining room furniture
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- Figure 34: Estimated retail sales (including VAT) of selected specialist retailers (living and dining room furniture), 2015-19
- IKEA has the smallest store portfolio of all the major specialists …
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- Figure 35: Store numbers for selected specialist retailers, (living and dining room furniture), 2015-19
- … but records the highest sales per store
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- Figure 36: Sales per outlet (including VAT) of selected retailers (living and dining room furniture), 2015-19
Competitive Strategies
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- DFS focusing on four core areas for future development
- ScS strengthens flooring offer to boost wide revenues
- Made.com exploiting Pinterest as it seeks develop sales
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- Figure 37: Made.com and Pinterest, October 2020
- Sterling Furniture looking to re-brand
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- Figure 38: Sterling Furniture Concept Store, December 2019
- IKEA re-focuses attention on city centre retailing
- Carpetright and Furniture Village working together via concessions
Launch Activity and Innovation
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- Low cost solutions for home working
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- Figure 39: Ministry of Makers, collapsible furniture, May 2020
- COVID-19 gives AR renewed interest
- Online-only furniture and sofa specialists pop-up stores
Advertising and Marketing Activity
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- Promotional support has fallen back since peaking in 2016
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- Figure 40: Total above-the-line, online display and direct mail advertising expenditure on living and dining room furniture, 2015-19
- Lockdown sees collapse in advertising expenditure
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- Figure 41: Total above-the-line, online display and direct mail advertising expenditure on living and dining room furniture, 2019 & 2020 (January to July)
- DFS dominates the market when it comes to expenditure
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- Figure 42: Recorded above-the-line, online display and direct mail total advertising expenditure on living and dining room furniture, by advertiser, 2015-19
- Television dominates as the preferred channel for advertisers
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- Figure 43: Recorded above-the-line, online display and direct mail total advertising expenditure on living and dining room furniture, by media type, 2019
- Oak Furnitureland invested 99.9% of its budget on television in 2019
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- Figure 44: Recorded above-the-line, online display and direct mail total advertising expenditure on living and dining room furniture, by media type and advertiser (selected advertisers 2019)
- Nielsen Ad Intel coverage
The Consumer – Key Takeaways
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- Consumers are becoming more confident about personal expenditure
- Separate living and dining rooms more likely for older adults
- Young families are important despite expenditure levels being low
- Sofas and dining tables are popular with recent house buyers
- Young adults want more from living and dining space
- Young families are a group that offers opportunities
- Sustainability and value both register strong interest
Impact of COVID-19 on Consumer Behaviour
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- Acceptance of the risks associated with COVID-19 are growing
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- Figure 45: Worries about risk of exposure to COVID-19, March-September 2020
- Consumers are cautiously optimistic about future spending plans
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- Figure 46: Spending habits (Home and garden products (eg furniture, domestic appliances etc), March-September 2020
- Fewer adults are cutting back on non-essential spending …
- … although more are shopping differently
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- Figure 47: Shopping habits since COVID-19, May-September 2020
Types of Living Space
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- Majority have a separate dining room
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- Figure 48: Type of living room, August 2020
- Older adults are more likely to have a separate dining space
- Space restrictions in flats and apartments favour open plan layout
- Separate dining rooms are not commonplace
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- Figure 49: Type of dining room, August 2020
- Older adults also more likely to have a separate space for dining
- Perception of combined space more evident for dining rooms
- Detached properties are more likely to have a separate dining room
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- Figure 50: Type of dining room, by property type, August 2020
Expenditure on Living and Dining Room Furniture
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- Majority of adults did not spend anything in the past 12 months
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- Figure 51: Expenditure on living and dining room furniture, august 2020
- Older and less affluent least likely to be purchasing
- Young families and recent purchasers important for sub-£750 expenditure
- Highest earners shouldn’t be overlooked as the biggest spenders
- Established property owners represent a poor market opportunity
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- Figure 52: Expenditure on living and dining room furniture, by time in home, August 2020
- Apartment owners offer a useful market for smaller items of furniture
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- Figure 53: Expenditure on living and dining room furniture, total versus flat/apartments, August 2020
Living and Dining Room Furniture Purchases
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- Consumer demand is focused on living rooms
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- Figure 54: Living and dining room furniture purchases (by room), august 2020
- Sofas are the most popular product purchased
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- Figure 55: Living and dining room furniture purchases (by product), august 2020
- Sofas and dining tables are a favourite for new home owners
- Detached homes offer more opportunities
- Use of living/dining space for exercise encourages purchasing
- Slump evident in purchase of many large items of furniture
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- Figure 56: Living and dining room furniture purchases (by product), 2017 and 2020
Use of Living Space
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- Demands from living space are increasingly broadening
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- Figure 57: Use of living space, august 2020
- Women have broader demands than men
- Young adults see use of space for exercise and wellbeing activities
- Premium opportunities evident for certain products
- Home working is important for those in the rented market
Future Purchase Intentions
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- Consumers remain cautious about future spending
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- Figure 58: Future purchase intentions, august 2020
- Young families are a key market
- City residents offer potential
- New home owners shouldn’t be overlooked
Attitudes towards Living and Dining Room Furniture
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- Strong interest in sustainability
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- Figure 59: Attitudes towards living and dining room furniture, august 2020
- Young adults favour value retailers
- City living pushing interest towards shopping online
- Older adults are an important market for UK manufacturers
- Could online rescue the dining room sector?
- Value retailers have an opportunity
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
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