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The Dining and
Occasional Furniture sector forms part of the overall UK Furniture market
which consists of Upholstered Furniture and Beds, Bedroom Furniture,
Kitchen Furniture, Bathroom Furniture and Home Office Furniture and was
worth an estimated £4 billion in 2002. The overall market was dominated
by Upholstered Furniture and Beds with a 45% value share, followed by
Kitchen furniture with a 23% share.
The Dining and
Occasional Furniture sector has gradually decreased in terms of overall
market share, accounting for around 13% of the overall furniture market
with an approximate value in 2002 of £522 million. Forecasts to 2006
estimate annual increases of around 1-2% to reach a value of £549 million
by 2006.
As a mature
sector, the dining and occasional market has experienced gradual growth
over the period. During 1997, the dining and occasional market experienced
7% growth, supported by building society de-mutualisation dividends, a
buoyant housing market and high levels of consumer confidence. Between
1997 - 2001, the growth levels have slowed to 2-3%, affected by the
general economic downturn and the slowing down of the house building and
house moving sectors in 1998/early 1999. Since 2001, the growth levels
have slowed down to 1-2%, due to the uncertainty of the economic climate,
in respect of events such as September 11th and the Iraq conflict.
The outlook
for dining and occasional furniture is relatively optimistic, owing
largely to the growing demand for certain items of occasional furniture.
However, the relatively weakened demand for dining furniture is likely to
result in low to moderate growth in the medium term for the market as a
whole.
Key
characteristics of the dining market are its deferrable nature and low
usage in comparison to other furniture items within the home. In addition
to these factors, the increasing volume of single occupancy households and
the trend towards smaller room sizes, have reduced the need for
traditional dining suites. However, the demand for smaller items of
occasional furniture has increased and, with greater levels of casual
dining and technology in the home, the level of usage tends to be higher
in the occasional sector.
Sectors of the
occasional market experiencing growth include; wall units/ storage units,
bookcases and shelves, and coffee and occasional tables. Wall units are
becoming more popular, largely due to the increasing pressure on space,
and the amount of storage they provide. In addition, the variety of add-on
features now available, such as doors and drawers, and the emergence of
modular furniture which can be used in a variety of areas throughout the
home have contributed to their popularity. Coffee and occasional tables
also remain strong as the trend towards casual dining and 'TV dinners'
continues.
The Home
Office Furniture market was worth an estimated £189 million during 2002
and the growth of this sector has significant implications for the future
of both dining and occasional furniture. The growth in the number of
people working from home has resulted in the increasing use of the dining
room - the least used room - as a multi-purpose area. In addition to this,
demand has been stimulated for occasional pieces of furniture, e.g.
shelving and storage units such as bookcases. The entertainment unit
sector has seen a decrease in market value largely due to changes in the
design of technology.
The furniture
market has become more fashion-oriented and fuelled consumers demand for
more innovation in furniture, as well as more versatility and
functionality to suit the changing socio-economic environment. Demand for
furniture has become more subject to changing consumer tastes, while price
has also become a major driver in the market. Consumer responsiveness to
lower prices may depress the chance of any real growth with in the market.
The growth of self-assembly furniture will also add further pressure on
market growth rates in the dining and occasional sector - reasons for this
include the low price, the immediacy and convenience of self-assembly
furniture and the growth in demand for modular/flexible furniture items.
The leading
types of furniture offered in self-assembly format tend to be foil and
wood veneer finished, which are less expensive than solid wood. The light
to medium colour finishes will continue in popularity. In terms of real
wood furniture, the market will see a resurgence of popularity towards
darker woods.
International
trade in the dining and occasional market has been affected by consumer
response to low prices and the strength of Sterling in recent years, which
has led to greater import penetration of the UK market and an increasing,
negative trade balance. In 2002, imports represented approximately 60% of
the dining and occasional market, an increase of around 10% on the
previous year. China has overtaken Malaysia as the largest import source
of dining and occasional furniture to the UK.
Estimates
indicate that there are approximately 4,100 companies within the dining
and occasional sector. Major suppliers include Silentnight Holdings (Silentnight
Cabinets, and branded ranges such as Nathan, Ducal and Stag), followed by
Wade, Ercol and H. Morris & Co. (G-Plan, Morris Furniture and
Beautility).
The furniture
multiples take the largest share of the dining and occasional furniture
market, largely due to their strength in national coverage. IKEA opened a
new store in Cardiff, and MFI and Harvey's have undertaken vast
refurbishment. Department stores and variety stores have increased their
market share, as they increase their portfolios. Some companies have
started to open stand-alone homewares stores. Key organisations include
John Lewis, Allders and Marks & Spencer.
Grocery
retailers have entered the homewares market, offering a range of home
furnishings and furniture. The use of the Internet has seen marginal
expansion, mainly from existing multiples, department and variety stores.
The use of the Internet is still very much a marketing tool, but the
number of e-commerce sites are increasing.
Major volume
growth within the dining and occasional market seems unlikely in the
foreseeable future. Stimulus to the future value growth of the sector is
anticipated to come from consumers continuing to 'trade up' to better
quality products, and the continuing trend to modular, versatile
occasional furniture items to meet the increasing pressures on space. With
an increase in interest rates, and more expected increases in 2004, in
addition to consumer confidence currently under pressure, it seems likely
that the market will be relatively flat in the short-term future. In
addition, constant pressures on lower prices and the increasing number of
cheap imports may depress any chance of real growth in the medium term. |
