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The upholstered furniture and beds market was estimated
to be worth around
£2.1bn msp
in 2005. Over the past two years, market growth has been lower compared
to earlier this decade.
Underlying annual
growth rates are estimated at around 1% in 2005, following lower levels
of consumer confidence and a less optimistic economic environment. In
addition, the market has experienced high levels of price competition in
both the beds and upholstered furniture sectors. The high level of lower
cost imports is also influencing the development of the market.
During 2005, the
fairly low level of growth exhibited by the market was also influenced
by the slowdown in the housing market and falling levels of consumer
confidence.
Both the
upholstered and beds markets are responsive to fluctuations in consumer
confidence partly due to the deferrable nature of big-ticket items. This
has affected overall sales in 2005 and early 2006, with purchases such
as these seen as non-essential and subsequently delayed during periods
of economic and consumer uncertainty. There is also a lengthy
replacement cycle, in relation to both markets, which can in turn
further restrict market growth.
Upholstered Furniture
In 2005, the
Upholstered Furniture Market was worth an estimated £1.5bn MSP, with the
domestic market accounting for around 89% and the contract sector the
remaining 11%.
The increasing
level of imports and the high level of price competition within the
upholstered market has restricted value growth in recent years. Leather
furniture in particular has gained share along with sofas and motion
furniture.
The mature nature
of the upholstered furniture market has prompted the development of many
niche sectors, as manufacturers try to target their products more
effectively and differentiate themselves from their competitors. This
has generally involved the creation of new brands and product ranges, in
addition to celebrity endorsements in order to target products at
specific sectors of the market.
Sofas
are estimated to account for approximately 63% of the market, with
demand having increased at the expense of 3 piece suites.
Action furniture
has also increased and now accounts for 20% of the market compared to
18% in 2004. Sofa
beds and other
furniture account for around 10% of the market by value. This area has
remained fairly stable with a wider range of sofas including sofa bed
mechanisms supporting share, along with other factors such as smaller
new build properties etc.
The growth of
leather furniture has by far exceeded that of the overall upholstery
sector, although the level of price competition has increased in this
sector, which may affect value growth in the medium term. Other key
factors supporting the leather sector include the wider range of styles
and designs now available, along with the wider use of leather in other
furniture sectors, in addition to home furnishings and accessories.
Imports continue
to increase in this sector accounting for 51% of the market in 2005 at
£759m. The EC, including countries such as Italy and Belgium account for
the majority.
In 2005 exports
were worth around £63m, accounting for approximately 4% of total UK
output, a figure that has remained static during the last two years. Key
export destinations from the United Kingdom include the Irish Republic,
the Netherlands and Germany.
The supply
structure of the upholstered furniture market has changed dramatically
over recent years following the sale of the
Christie Tyler
subsidiaries.
As a result, key suppliers to the market now include
Sofa Brands International,
JDP Furniture Group, DFS,
Natuzzi, Tetrad
and
Furnico.
The furniture
multiples continue to dominate product distribution with a 48% market
share, although department and variety stores have gained market share
in recent years.
Beds
The beds market
increased by 2% to £650m in 2005, compared with £637m in 2004. In
addition to underlying macro-economic factors, a key strength for the
bed industry is that consumers typically regard beds as essential and
not discretionary purchases. However, the high level of price
competition in certain sectors of the beds market has affected value
growth during the last two years.
In terms of
product mix, divans
account for around 42% of the market by value, but market share has
slowly been eroded by strong growth in demand for
bedsteads,
particularly wooden
and upholstered bedsteads. Overall bedsteads account for around 29% of
the market by value with growth supported by the wider range of product
options now available. Imports of metal bedsteads accounted for 51% of
bed imports by value in 2005 having declined since 2004, although
overall imports increased from £106m in 2004 to £116m in 2005.
By value,
mattresses
account for around 22% of the market, which is an increase of 4% since
2004. This steady growth in the market has been underpinned by the
growth in the higher value pocket sprung sector, along with other
materials such as memory foam. Mattresses are one specific area of the
beds market where opportunities for value growth exist with consumers
trading up to higher quality products. In addition, the growth of
bedsteads has also supported the demand for higher quality mattresses.
During the last 5
years, there has been a marked trend away from single to double beds,
and in particular king sized beds have gained market share. This growth
can largely be attributed to the fall in price of a double, or larger,
bed in comparison to a single bed, which has been driven down as a
result of the high level of price competition within the market.
The beds sector is
more concentrated in terms of suppliers than the upholstered furniture
market and is dominated by two major suppliers namely
Silentnight and
Simmons Bedding Group.
Other key suppliers include
Slumberland, Dunlopillo, Relyon
and
Sprung Slumber.
In common with the
upholstery market, the distribution of beds is predominately accounted
for by the furniture multiples who have a 35% market share. However,
other channels such as specialist stores, together with department and
variety stores have gained market share at the expense of the furniture
multiples over the last year or two. |
