Some of the UK’s biggest furniture and floorcovering retailers are set to benefit this golden quarter as the market makes a return to growth, according to GlobalData.
The likes of Ikea, Argos and John Lewis were among the retailers that are in line to see sales growth off the back of the sector’s recovery, following an extended period of reduced consumer confidence in home improvement.
GlobalData reports that after six quarters of decline, the Budget on October 30 should “remove a dampener on consumer confidence”, and a 10.9% uplift in housing transactions between April and August could loosen consumer’s purse strings when it comes to investing in bigger-ticket items for their homes.
The retailers mentioned by the analytics company stand to benefit most due to their shorter lead times, having invested in domestic manufacturing.
GlobalData senior retail analyst Matthew Walton said: “Furniture and floorcoverings have had a challenging 2024 as shoppers have prioritised 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.
“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 that 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
“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.”
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