MFI reigned over the market for more than 20 years, but is set to fall behind DFS and Ikea, after coming under new ownership this year, while Argos is on track to become the leader with a market share of 6.2 per cent.
According to Verdict, MFI's problems stemmed from a dysfunctional supply chain and a 'disastrous repositioning exercise in 2004', which was compounded by increasingly tough market conditions in 2005 and 2006.
Verdict senior retail analyst Alastair Lockhart said: 'While the previous management had put into place a sensible recovery plan, ultimately it turned out to be too late. Meanwhile, Argos has been aggressively targeting furniture growth. Over the past five years the retailer has expanded its furniture offer substantially with new ranges to improve customer choice, and has been incredibly busy opening new stores across the country.'
However, despite its fall from grace, all is not lost for MFI. The firm's new chief executive Gary Favell used to run rival business Magnet and the furniture retailer has an extensive portfolio of recently refurbished stores and a pipeline of investment on the agenda.
Verdict expects Ikea is well placed in the future to challenge the furniture top spot. Lockhart said: 'With each of Ikea's large destination stores accounting for about 0.4 per cent of furniture market share, a relatively small number of new store openings could actually push Ikea into pole position during the next five years.'
The survey also revealed that upholstery retailers Land of Leather and ScS have both grown rapidly this year, often opening in sites vacated by other failed specialists. Dreams has also taken advantage of the high supply of retail units available on secondary out-of-town retail parks.
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