Furniture And Floorcoverings Market To Return To Growth In Q4

The UK furniture and floorcoverings market is set to return to growth in Q4 2024 after six quarters of decline as the October Budget should remove a dampener on consumer confidence, and the 10.9% uplift in housing transactions between April and August 2024 and real wage growth filter through. This presents an opportunity for retailers with shorter lead times, such as IKEA, Argos, and John Lewis, and those who have invested in domestic manufacturing, according to GlobalData, a leading data and analytics company.

Matt Walton, Senior Retail Analyst at GlobalData, comments: “Furniture and floorcoverings has had a challenging 2024 as shoppers have prioritized essentials and consumer confidence has been brittle. Future consumer sentiment has taken a sharp downturn recently, after a recovery in H1 2024, mainly due to concerns about how the Budget will affect shoppers’ finances. However, should its impact be marginal, the recovery in consumer confidence will boost spend on big-ticket categories.”

An increase in housing transactions since April 2024 and a full year of real wage growth will also help release pent-up demand. There are signs of this release starting, with DFS reporting year-on-year order growth since July and figures from GlobalData’s Consumer Sentiment Tracker showing that a greater proportion of shoppers will spend more on furniture and floorcoverings over the next six months on a year-on-year basis, with a particular uplift since July 2024. However, weak consumer confidence is currently inhibiting spend.

Walton continues: “Once the Budget has been announced and consumers can gauge their financial position, the current pent-up demand will start to be released. IKEA, Argos and John Lewis are among the retailers who will benefit from this. The Budget will occur after the deadline for Christmas delivery has passed for many furniture specialists, so retailers with shorter lead times will benefit initially from the recovery. Retailers who have invested in domestic manufacturing, such as DFS, Bensons for Beds and Dreams, will also benefit as they can circumnavigate the current Red Sea disruption.

Walton concludes: “Retailers with shorter lead times, like John Lewis, will be among the main beneficiaries from the improving conditions in Q4, and it will also benefit from Marks & Spencer exiting furniture, the return of Never Knowingly Undersold and the launch of new upholstery ranges.”

Source : GlobalData

Image : Africa Studio / 549055441 / Shutterstock.com

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