Living and Dining Room Furniture - UK - October 2019

OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
Market growth slows amid some uncertainty
Figure 1: Consumer spending on living and dining room furniture, 2014-24
Brexit headwinds set to subdue growth
Housing transactions cool for a second year
Consumer confidence remains resilient despite uncertainty
Companies and brands
Specialist stores lead sales, two retailers fall into administration…
…but online channels continue to grow
DFS remains the market leader, with IKEA close behind
The consumer
Ownership of separate living rooms is over double that of dining rooms
Figure 2: Type of living room, August 2019
Consumers are expecting more from their living and dining rooms
Figure 3: Use of living and dining space, August 2019
Spending peaks among younger shoppers
Figure 4: What they spent on living and dining room furniture, August 2019
Living room, and sofas, dominate purchases
Figure 5: Living and dining room furniture purchases, August 2019
The growing need for flexibility
Figure 6: Attitudes towards living and dining room furniture, August 2019
Potential avenues for growth in the living and dining room market
Figure 7: Interest in living and dining room furniture, August 2019
What we think
ISSUES AND INSIGHTS
The need for multipurpose living spaces drives a growing expectation for furniture to do more
The facts
The implications
Another administration underlines ongoing challenges in the marketplace for furniture retailers
The facts
The implications
The opportunity for premium furniture services
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Market growth slows amid some uncertainty
Growth forecast to slow as the UK navigates its exit from the EU
Housing transactions cool, but remain historically high
Consumer confidence remains resilient despite uncertainty
MARKET SIZE AND FORECAST
Market growth slows amid some uncertainty
Brexit headwinds set to subdue growth
Figure 8: Consumer spending on living and dining room furniture, 2014-24
Figure 9: Consumer spending on living and dining room furniture, 2014-24
Market segmentation
Figure 10: Consumer spending on living and dining room furniture, estimated breakdown by category, 2018
Forecast methodology
MARKET DRIVERS
Housing transactions cool for a second year…
Figure 11: Number of residential housing transactions over £40,000, 2009-18
Figure 12: Monthly change in the number of residential housing transactions over £40,000 compared to the previous year, January 2018-July 2019
…but the number of households continues to rise
Figure 13: Number of UK households, 2013-23
Consumer confidence remains resilient despite uncertainty
Figure 14: Consumer confidence in the state of finances and their finances compared to the previous year, January 2017-July 2019
Figure 15: Spending on the home, actions and intentions, January 2017-August 2019
Inflation returns to stability following 2017 spike
Figure 16: Annual rate of inflation, 2007-18
Figure 17: Inflation, July 2018-July 2019
Nearly a fifth of households are now privately renting
Figure 18: Housing stock in England, by tenure, 1998-2018
Three quarters of consumers live in a house
Figure 19: Type of dwelling lived in, August 2019
Consumers appear confident of taking on credit
Figure 20: Consumer credit excluding student loans, August 2017-July 2019
Figure 21: Availability of consumer credit to households, Q1 2012-Q2 2019
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Specialist stores lead sales, two retailers fall into administration
Online continues to grow its share
DFS remains the market leader, with IKEA close behind
Technological innovations changing the shape of furniture
Advertising spend falls 1.6% in 2018
CHANNELS OF DISTRIBUTION 
Specialist stores remain the largest channel, despite administrations
Department stores slip up slightly amid high street challenges
Online share creeps up
Figure 22: Estimated channels of distribution for living and dining room furniture, 2018
MARKET SHARE
DFS and IKEA consolidate at the top
John Lewis and M&S lose share as high street footfall drops
Online players appear on the horizon
Figure 23: Estimated market shares of the living and dining room furniture market, 2018
LAUNCH ACTIVITY AND INNOVATION
Harth reimagines furniture rental
Figure 24: Harth range, September 2019
3D print it
Figure 25: 3D printing, September 2019
Sofa in a box
Figure 26: Snug Shack ‘sofa in a box’, September 2019
Chesterfield’s ‘Vegan’ Sofa
Smart-tech living and dining room furniture
MANUFACTURER PROFILES
Devonshire Pine & Oak
Figure 27: Devonshire Pine Limited financial performance, 2017 and 2018
Ekornes
Figure 28: Ekornes financial performance, 2016 and 2017
Ercol Furniture Limited
Figure 29: Ercol Furniture Limited financial performance, 2016 and 2017
Furnico Furniture Limited
Figure 30: Furnico Furniture Limited financial performance, 2017 and 2018
JDP Furniture Group Limited
Figure 31: JDP Furniture Group Limited financial performance, 2017 and 2018
Sherborne Upholstery Limited
Figure 32: Sherborne Upholstery Limited financial performance, 2017 and 2018
1869 Limited
Figure 33: 1869 Limited financial performance, 2017 and 2018
Westbridge Furniture Designs Limited
Figure 34: Westbridge Furniture Designs Limited financial performance, 2016 and 2017
ADVERTISING AND MARKETING ACTIVITY
Advertising spend falls 1.6% in 2018
Figure 35: Total above-the-line, online display and direct mail advertising expenditure on living and dining room furniture, 2014-18
DFS continues to dominate spending
Figure 36: Total above-the-line, online display and direct mail advertising expenditure on living and dining room furniture, by retailer, 2018
Adspend falls among leading retailers
Figure 37: Total above-the-line, online display and direct mail advertising expenditure on living and dining room furniture, by retailer, 2014-18
Figure 38: Share of total above-the-line, online display and direct mail advertising expenditure on living and dining room furniture, by retailer, 2014-18
TV accounts for two thirds of expenditure…
Figure 39: Total above-the-line, online display and direct mail advertising expenditure on living and dining room furniture, by media type, 2018
…having grown its hold in recent years
Figure 40: Proportion of above-the-line, online display and direct mail advertising expenditure on living and dining room furniture, by media type, 2014-18
Leading retailers adopt a number of different strategies
Figure 41: Above-the-line, online display and direct mail advertising expenditure on living and dining room furniture, by media type and advertiser, 2018
Campaign highlights
Sofology chooses Owen Wilson to lead advertising charge
Harveys partners with Louise Redknapp
DFS celebrates 50th anniversary with Aardman Animations studio
Swoon launches debut TV campaign
Nielsen Ad Intel coverage
THE CONSUMER – WHAT YOU NEED TO KNOW
Ownership of separate living rooms is over double that of dining rooms
Consumers are expecting more from their living and dining rooms
Spending peaks among younger shoppers
Living room, and sofas, dominate purchases
The growing need for flexibility
Potential avenues for growth in the living and dining room market
TYPES OF LIVING SPACE
The majority still enjoy a separate living room…
Figure 42: Type of living room, August 2019
…but just over a quarter of consumers have a separate dining room
Figure 43: Type of dining room, August 2019
Homeowners enjoy more space
Figure 44: Type of dining room, by dwelling type, August 2019
USE OF LIVING SPACE 
Consumers are expecting more from their living and dining rooms
Figure 45: Use of living and dining space, August 2019
Changing needs for the living space driven by younger consumers
Figure 46: Use of living and dining space, by age, August 2019
Figure 47: Use of living and dining space, by age, August 2019
The need for workspaces amid the rise of working from home
WHAT THEY SPENT 
More than half of consumers did not buy any furniture in the past year
Figure 48: What they spent on living and dining room furniture, August 2019
Spending peaks among 16-34 year olds, but 35-44s are central to large purchases
Figure 49: What they spent, by age, August 2019
New movers tend to focus more on essential, cheaper furniture
Figure 50: What they spent, by duration in current home, August 2019
Homeowners spearhead spending
Figure 51: What they spent, by dwelling type, August 2019
LIVING AND DINING ROOM FURNITURE PURCHASES 
The living room dominates recent purchases
Figure 52: Living and dining room furniture purchases, August 2019
Figure 53: Living and dining room furniture purchases, by duration in current home, August 2019
Demand for dining room furniture varies according to space in the home
Figure 54: Living and dining room furniture purchases, by dwelling type, August 2019
Homeowners buy more furniture
Figure 55: Living and dining room furniture purchases, by tenure, August 2019
Over a third of shoppers purchased three or more items of furniture
Figure 56: Living and dining room furniture purchases, repertoire, August 2019
ATTITUDES TOWARDS LIVING AND DINING ROOM FURNITURE
Comfort reigns supreme…
…but its importance varies by age
Figure 57: Attitudes towards living and dining room furniture, August 2019
The appeal of flexibility greatest among flat owners
Figure 58: Attitudes towards living and dining room furniture, by dwelling type, August 2019
Priorities for furniture differ significantly with age
Figure 59: Attitudes towards living and dining room furniture, by age, August 2019
The need for stores is falling among younger shoppers
Figure 60: Agreement with the statement "It's necessary to visit a store when purchasing premium items of living/dining room furniture (ie £500+)", by age, August 2019
INTEREST IN LIVING AND DINING ROOM FURNITURE 
Rapid development in visualisation technologies
Consumers opening up to the idea of built-in technologies
New movers seek design guidance
Figure 61: Interest in living and dining room furniture, August 2019
The growing opportunity for premium furniture rental services
Figure 62: Interest in the statement "Living/dining room furniture that could be rented rather than bought outright", by household income, August 2019
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – MARKET SIZE AND FORECAST
Forecast methodology