Living Room Furniture - UK - February 2006

Table of Contents

• Introduction and Abbreviations
• Definition
• Consumer research
• ACORN
• Advertising data
• Abbreviations
• Executive Summary
• Buoyant housing market has been largely positive...
• ...but retraction in consumer spending effecting a market slowdown
• Space and furniture requirements change with length of residency
• Leather is the main driver in upholstered furniture
• Sideboards and TV/entertainment units are popular purchases
• Vertically integrated businesses keep ahead of the competition
• DFS success is based on high advertising spend
• Impact of changing household structure
• Impact of the media
• Homebase and Argos lead the offensive against the furniturespecialists
• Changing the way of life in the future
• Market Drivers
• House moves impact on demand for living room furniture
  • Figure 1: Length of time in present home,2000-05
• PDI and consumer expenditure continue to rise
  • Figure 2: PDI and consumer expenditure,2000-05
• Personal debt, a burden or boost?
• Owner-occupation continues to rise
  • Figure 3: Household stock, by tenure,2000-05
• Household size
  • Figure 4: Household size, 2000 and 2005
• Smaller households demand different furniture pieces
• Extending the living space
  • Figure 5: Household ownership of homeextensions, 2001-05
• Home improvement -- a 'popular' leisure activity
  • Figure 6: Agreement with selectedlifestyle statements, 2000-04
• Home improvements and home style magazines
• Impact of decline in family eating together regularly, and rise inhome entertaining
  • Figure 7: Agreement with the statement'We usually have family meals at the weekend' and 'I enjoyentertaining people at home', by gender, age and socio-economic group,2001-05
• Decline in formal eating
• Cocooning driving home entertainment at home
• Homeworking and the rise of the laptop are changing workingpractices
  • Figure 8: Ownership of PCs, 2001-05
• Market Size
• Furniture sales suffer first when the consumer feelgood factor goes
  • Figure 9: UK retail sales of living roomfurniture, by value, 2000-05
• Market Segmentation
• Upholstered furniture has a shorter replacement cycle
  • Figure 10: UK retail sales of upholsteredand non-upholstered living room furniture, by value, 2002 and 2004
• Leather growing in popularity as product prices fall
  • Figure 11: UK retail sales of living roomupholstered furniture, by type and value, 2002 and 2004
• Lift and rise chairs live up to their name in the marketplace
• Ready-assembled furniture assembles a lead over flatpack
  • Figure 12: UK retail sales of cabinet andoccasional living room furniture, by method of assembly and value, 2002and 2004
• The Supply Structure
• Company share
  • Figure 13: Estimated manufacturer share ofUK sales of living room furniture*, by retail value, 2002 and 2004
• Vertically integrated businesses compete more effectively
• Level of brand recognition is low
• Major companies and brands
• Sofa Brands International
• DFS Furniture Company plc
• Ekornes Ltd
• Ercol Furniture Limited
• IKEA
• MFI Furniture Group
• Vale Upholstery Limited with Bridgecraft Furniture Limited
• JDP Furniture Group Limited with Wade Furniture Group and MultiyorkFurniture Limited
• Stag Furniture (UK) Ltd
• La-Z-Boy Incorporated
• Thomas Lloyd Group
• New Product Developments and Trends
• The TV, the computer and the DVD determine furniture design
• Conservatories add an extra living room requiring lighter furnituredesigns
• Hard woods and painted pine are stealing a march on natural pine
• Versatile, multi-functional and collapsible furniture items to suitsmall spaces and multi-purpose rooms
• The flatpack revolution is extended to sofas
• New shades and styles of leather upholstery expand the mass market
• Impact of health and safety issues on living room furnitureproduction and demand
• Advertising and Promotion
  • Figure 14: Main monitored mediaadvertising expenditure on living and dining room furniture, 2000-05
• Company spend
  • Figure 15: Top ten main monitored mediaadvertisers for living and dining room furniture, by company spend, 2003and 2004
• DFS ranks among top-spending UK advertisers in 2004
  • Figure 16: Top ten brands by adspend,October 2005
• Media expenditure on living and dining room furniture by mediachannel
  • Figure 17: Main monitored mediaadvertising expenditure on living and dining room furniture, by mediachannel, 2004 and 2005
• Advertising around bank holidays
  • Figure 18: Main monitored mediaadvertising expenditure on living and dining room furniture, by month,January 2004-December 2005
• Below-the-line promotions
• Distribution
• Furniture multiples dominate
• Tough time for established retailers
  • Figure 19: UK retail sales of living roomfurniture, by type of outlet and value, 2002 and 2004
• Homebase is leading the offensive from the DIY multiples
• Internet and catalogue marketing are the dynamic retail sectors
• Selected leading multiples
• IKEA
• MFI Furniture Group
• DFS Furniture Company plc
• ScS Upholstery plc
• Heal's plc
• Land of Leather
• Furniture Village
• Multiyork
• Kingdom of Leather and Natuzzi spa
• Reid Furniture
• Homestyle Group plc
• Department stores
• House of Fraser
• Marks & Spencer
• Debenhams
• DIY multiples
• Focus
• Homebase
• Catalogue shops and mail order
• Argos
• Supermarkets
• Asda
• Tesco
• Living Room Furniture on the Internet
• Channel for information
  • Figure 20: Top ten most visited UK homeand garden retail websites, week to 19 November 2005
• Broadband opening up opportunities
• Pinesolutions UK
• Satellite shopping channels
• The Consumer
• Household Layout
  • Figure 21: Living room/area layout inhousehold, September-October 2005
• Home living area layout
• AB consumers are key target market
  • Figure 22: Agreement with selectedstatements, by socio-economic group, September-October 2005
• Potential at two levels
  • Figure 23: Agreement with selectedstatements, by Mintel's Special Groups, September-October 2005
• Space and furniture requirements change with length of residency
  • Figure 24: Agreement with selectedstatements, by length of current residence and household tenure,September-October 2005
• Combined is affordable
• Purchasing triggers
  • Figure 25: Purchasing triggers for livingroom furniture, September-October 2005
• House moves and redecoration are primary drivers
• Barriers to credit lowering
• Young adults a key target market
  • Figure 26: Purchasing triggers, by age,September-October 2005
• Affluence is a key indictor
• Broadsheet vs commercial TV advertising
• Purchase incentives for movers
• Items of furniture owned, by type
  • Figure 27: Items of furniture owned, June2005
• Home entertainment takes precedence in the living area
• Comfort and entertainment largely dictate furniture requirements
  • Figure 28: Number of items of furnitureowned, June 2005
• Six is the magic number
• CHAID analysis
  • Figure 29: Optimal target groups forownership of furniture pieces, June 2005
• Length of tenure determines need
• Detailed Demographics
• Household layout
  • Figure 30: Living room/area layout inhousehold, by gender, age and socio-economic group, September-October2005
  • Figure 31: Living room/area layout inhousehold, by presence of children, lifestage and Mintel's SpecialGroups, September-October 2005
  • Figure 32: Living room/area layout inhousehold, by marital status, working status and household size,September-October 2005
  • Figure 33: Living room/area layout inhousehold, by region and ACORN category, September-October 2005
  • Figure 34: Living room/area layout inhousehold, by media usage, commercial TV viewing and supermarket usage,September-October 2005
  • Figure 35: Living room/area layout inhousehold, by length of current residence and household tenure,September-October 2005
• Purchasing Triggers
  • Figure 36: Purchasing triggers for livingroom furniture, by gender, age and socio-economic group,September-October 2005
  • Figure 37: Purchasing triggers for livingroom furniture, by presence of children, lifestage and Mintel'sSpecial Groups, September-October 2005
  • Figure 38: Purchasing triggers for livingroom furniture, by marital status, working status and household size,September-October 2005
  • Figure 39: Purchasing triggers for livingroom furniture, by region and ACORN category, September-October 2005
  • Figure 40: Purchasing triggers for livingroom furniture, by media usage, commercial TV viewing and supermarketusage, September-October 2005
  • Figure 41: Purchasing triggers for livingroom furniture, by length of current residence and household tenure,September-October 2005
• The Future
• Home ownership and mobility fuel the market
  • Figure 58: Household stock, by tenure,2005-10
• Multi-functional furniture designed for the smaller household is apriority
  • Figure 59: Household stock, by householdsize, 2005 and 2010
• Home improvement means more furniture sales
• Increasing presence of the large retailers in the market
• Growth of the Internet
• Forecast
  • Figure 60: Forecast of UK retail sales ofliving room furniture, 2005-10
• Growth forecast set to rise
• Smaller households helping growth
• Factors incorporated in the forecast