Living- and Dining-room Furniture - UK - November 2003

Contents

Introduction and Abbreviations

• Definitions
• Consumer research
• ACORN

Abbreviations

Executive Summary

• Buoyant housing market acts as a major driver
• Modest growth in retail value reflects price competition
• Increasing popularity of leather and self-assembly furniture
• Dining room furniture proving a challenge
• Supply remains fragmented
• Adspend remains robust despite sluggish sales
• Furniture multiples increasingly capture market share
• Consumer interest in furniture purchases remains generally strong
• Future for the market remains a challenge

Market Drivers

• The greater the number of households, the greater the potential for sales
• Figure 1: UK housing stock, by tenure, 1998-2007
• Household size and the importance of families
• Figure 2: Indexed trends in UK household size, 1998-2007
• Buoyant housing market also helpful
• Figure 3: Number of UK household transactions, 1998-2007
• Growth in discretionary income encourages purchase
• Figure 4: Trends and projections in PDI, consumer expenditure and savings ratio, 1998-2007
• Middle-aged buyers - an emerging sector within the market
• Figure 5: Trends and projections in the UK population, by age group 15+, 1998-2007
• Consumer interest in home improvement remains strong
• Warm summers can depress demand
• Lifestyle changes - creating ripples within the market
• Effects of competition within the market

Market Size and Trends

• Living and dining room furniture dominate expenditure in the sector
• Figure 6: UK retail sales of furniture, by type and value, 2000 and 2002
• Limited growth of living and dining room furniture
• Figure 7: UK retail sales of living and dining room furniture, by value, 1998-2003
• Upholstered and dining room furniture: a fall in value
• Figure 8: UK retail sales of living and dining room furniture, by type and value, 2000 and 2002

Market Segmentation

Living room furniture

• Sales performance remains sluggish in face of competitive pressures
• Figure 9: UK retail sales of living room furniture, by value, 1998-2003
• Non-upholstered posts stronger growth in sales
• Figure 10: UK retail sales of upholstered and non-upholstered living room furniture, by value, 2000 and 2002
• Price competition hits value of upholstered
• Fabric sales suffer from rising affordability of leather
• Figure 11: UK retail sales of living room upholstered furniture, by type and value, 2000 and 2002

Dining room furniture

• Dining room furniture sales in decline
• Figure 12: UK retail sales of dining room furniture, by value, 1998-2003
• Method of assembly
• Figure 13: UK retail sales of living and dining room furniture, by method of assembly and value, 2000 and 2002

The Supply Structure

Production and trade

• A highly fragmented market
• Figure 14: UK retail sales of living and dining room furniture, by manufacturer and value, 2000 and 2002

Companies and brands

• Christie-Tyler Furniture Group
• DFS
• Ercol Furniture
• IKEA
• MFI Furniture Group
• Silentnight Holdings
• Others

Advertising and Promotion

• Use of above-the-line advertising remains strong
• Figure 15: Main monitored media advertising expenditure on living and dining room furniture, 1998-2003
• Major retailers dominate advertising expenditure
• Figure 16: Main monitored media advertising expenditure on living and dining room furniture, by five highest-spending suppliers, 2000-02
• Adspend according to media channel
• Figure 17: Main monitored media advertising expenditure on living and dining room furniture, by media channel, 1998-2002

Distribution

• Multiples increasingly steal share
• Figure 18: UK retail sales of living and dining room furniture, by type of outlet and value, 2000 and 2002

Selected leading multiples

• IKEA
• MFI Group
• DFS Furniture Company
• Courts
• SCS Upholstery
• Heal's
• Furnitureland
• Land of Leather
• Furniture Village
• Multiyork
• Kingdom of Leather
• Reid Furniture
• House of Fraser
• Selected other outlets

The Consumer Ownership and Future Purchase

• Ownership of living and dining room furniture
• Figure 19: Ownership of living and dining room furniture, 1998-2003
• Figure 20: Ownership of living and dining room furniture, by gender, age and socio-economic group, 2003
• Figure 21: Ownership of living and dining room furniture, by region, 2003
• Figure 22: Ownership of living and dining room furniture, by lifestage and presence of children, 2003
• Figure 23: Ownership of living and dining room furniture, by household size, ownership and length of tenure, 2003
• Purchase in last 12 months skewed towards under-35s
• Figure 24: Living and dining room furniture bought new in the last 12 months, 1998-2003
• Figure 25: Living and dining room furniture bought new in the last 12 months, by gender, age and socio-economic group, 2003
• Figure 26: Living and dining room furniture bought new in the last 12 months, by region, 2003
• Figure 27: Living and dining room furniture bought new in the last 12 months, by lifestage and presence of children, 2003
• Figure 28: Living and dining room furniture bought new in the last 12 months, by household size, ownership and length of tenure, 2003
• Expenditure on living and dining room furniture
• Figure 29: Expenditure on lounge/living room furniture purchased in the last 12 months, 1998-2003
• Figure 30: Expenditure on dining room tables and chairs purchased in the last 12 months, 1998-2003
• Figure 31: Expenditure on other dining room furniture purchased in the last 12 months, 1998-2003
• Living and dining room furniture is a relatively high priority
• Figure 32: Furniture purchasing plans for the next 12 months, June 2001 and April 2003
• Abs and dining room furniture
• Figure 33: Purchasing of living and dining room furniture in the next 12 months, by gender, age and socio-economic group, April 2003
• The importance of families
• Figure 34: Purchasing of living and dining room furniture in the next 12 months, by presence of children, lifestage and Mintel's Special Groups, April 2003
• Tenants as purchasers
• Figure 35: Purchasing of living and dining room furniture in the next 12 months, by home ownership, household size and length of tenure, April 2003
• Storage space a factor in London
• Figure 36: Purchasing of living and dining room furniture in the next 12 months, by region and ACORN category, April 2003
• Figure 37: Purchasing of living or dining room furniture in the next 12 months, by media usage, April 2003

The Future

• Market drivers remain generally positive...
• ...despite market's fixation with price
• Greater role for design
• Multi-functionality set to proliferate
• Retail consolidation at a pace

Forecast

• Limited growth in retail value forecast to 2007
• Figure 38: Forecast of the UK living and dining room furniture market, by value, 2003-07
• Living room furniture will remain dominant
• Space to become more of an issue
• Dining room furniture set to struggle
• Factors used in the forecast

Appendix: Research Methodology