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Dining and occasional furniture was estimated to
account for around 14% value share of the overall domestic furniture
market in 2007. In value terms, dining and occasional furniture was
estimated at around £780 million in 2007, representing 2% increase
on the previous year. The market declined in 2005 due to lower
levels of consumer confidence, increasing price competition, a
weakening economic climate and a slowdown in the housing market.
In 2007 the market experienced slight recovery,
benefiting from a more buoyant economic situation, but indications
are for further decline 2008-09 as a result of current uncertainty
surrounding key drivers such as the housing market and consumer
confidence levels.
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The dining and occasional furniture market remains
highly fragmented with increasing competition from imports, which are now
estimated to account for in excess of 60% of the market, and new entrants
into the market.
The medium term prospects for the market remain
uncertain with current indications of a downturn in 2008-09 followed by
moderate gains to 2012 when the market is expected to reach around £790
million. The main factor influencing future performance is the current
uncertainty and volatility of the short-term economic climate that makes
it extremely difficult to forecast in the medium term.
It is likely that demand will increase for smaller and
more versatile dining furniture that incorporate features such as
extendable sections, tables that fold down or can be stored more easily,
or are equipped with a storage facility in order to maximise space usage.
In contrast to the dining furniture market,
socio-economic trends and decreasing house sizes are working in favour of
the occasional sector, as many eating and lifestyle habits favour more
versatile, flexible and functional furniture.
Imports of dining and occasional furniture are likely to
increase their rate of penetration into the UK market resulting in greater
pressures for UK based manufacturers, particularly those targeting the
lower market sectors. Average prices are likely to remain under pressure
particularly in the lower-medium sectors of the market as lower cost
imports are likely to continue to exert downward price pressures. However,
in the upper sectors of the market, although price is likely to remain a
significant feature, consumers are more likely to continue to make
purchase decisions based on design and quality, helping to underpin this
sector of the market.
In terms of distribution channels, furniture
independents are likely to continue to lose share to furniture/furnishing
multiples as pressures on operating margins is likely to tighten in the
medium term. A more significant change to the distribution mix is that
grocery multiples are likely to extend their share following their recent
manoeuvres into the dining and occasional market. In addition, the
internet is also likely to gain significant share via the online trading
sites of established high street channels such as furniture/furnishing
multiples but also through dedicated online sites for furniture.
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