Competition is rising and capital expenditure on dwellings has weakened
London, UK (PRWEB) September 06, 2012
Furniture retailers have enjoyed little comfort over the past five years, with industry sales estimated to fall by an annualised 3.3%. Sales in the early part of the five years through 2012-13 were hindered by strong price- and product-based competition from department stores and online operators. According to IBISWorld industry analyst Claudia Burgio-Ficca, “trading conditions have remained intense, with players facing a challenging retail market following the financial crisis and resulting recession”. Demand for furniture, lighting and homewares has also been influenced by annual trends in disposable income, consumer sentiment, interest rates and capital expenditure on dwellings.
Trading conditions weakened in 2007-08, and this trend has continued over the five years through 2012-13. Consumer demand has been largely affected by rising interest rates and growth in fuel and commodity prices. With furniture being the third-highest cost item for households, after a house and car, many consumers have decided to defer buying new or updated furniture items. Consumers have instead chosen to concentrate on reducing debt. Trading conditions have also been affected by the austerity measures implemented by the British government.
Industry sales are expected to grow marginally over the next five years to 2017-18. In the short term, trading conditions will be affected by weak economic growth as a result of austerity measures across the UK marketplace. Deleveraging by the private sector and cuts to government spending will lead to a rise in the interest rate. Burgio-Ficca adds, “combined with weak growth in disposable incomes, this will affect capital expenditure on dwellings and result in a softer market for furniture, lighting and homeware products”. Continued intense competition from external competitors will also create a tough environment for retailers.
The Specialised Furniture, Lighting & Homeware Retailers industry comprises a large number of small independent retailers and a few large chain operators. It is estimated that the top four players will account for less than 35% of market share in 2012-13 giving the industry a low level of market share concentration. Competition from department stores is strengthening, and internet sales and the trend for some manufacturers and importers to sell direct to the public also pose external threats to the industry. The industry will remain largely small-business oriented and fragmented, with many niche and other operators servicing local or regional markets. Major companies include Home Retail Group, IKEA, Advent International Corporation (DFS) and Furniture Village.
For more information on the Specialised Furniture, Lighting & Homeware Retailers industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Operators in the industry sell household, outdoor and office furniture, and other household goods such as light fixtures, utensils, cutlery, crockery, glassware and non-electrical household appliances.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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