Supply Chain Review of the Furniture Industry Market Report - UK 2012-2016 Analysis


September 27, 2012
83 Pages - SKU: AJLA4886300
License type:
Countries covered: United Kingdom

AMA Research are pleased to announce the publication of the 1st edition of the report: ‘Supply Chain Review of the Furniture Industry Market Report – UK 2012-2016 Analysis’. The report includes up to date information on recent trends and issues that continue to impact on the supply of residential furniture through the supply chain into the different retail sectors.

The report contains:

AN OVERALL REVIEW OF THE SUPPLY STRUCTURE - analysis of major developments and key driving factors.
REVIEW OF THE MAJOR CHANNELS ACROSS THE SECTOR –assessment of each of the key retail channels.
REVIEW OF THE OPPORTUNITIES FOR GROWTH AND CHANGE
FORECASTS FOR MARKET DEVELOPMENTS UP TO 2016.


The report examines the various aspects driving change in the supply chain throughout the industry and assesses the likely future prospects for the sector through to 2016.

The market has followed an interesting path in recent years, with challenging trading conditions affecting many companies and a number of major retailers failing, in particular MFI, but also others such as Courts, World of Leather etc. Conversely a number of retailers have done very well, in particular the likes of IKEA or Dwell for example, while a number of alternative channels or companies have developed an interest in furniture, such as the grocery multiples, or the Internet channels.

Areas of particular interest include:

Market performance of Retail Multiple sector, positive performance of some key companies versus failure of others.

Assessment of how the supply chain structure is changing over the recession.

The changing role of the Internet in the supply of furniture is assessed in some detail.

A high level of imports, particularly from the Far East, continues to put pressure on UK manufacturers and influence certain key sectors of the market.

Leading companies mentioned in the report include:

Asda, A. Share & Sons, Argos, B & Q, Barker & Stonehouse, Bensons for Beds, BHS, C.S. Lounge Suites, Canburg, Cargo, Dean House, Debenhams, DFS Furniture, Dreams, Dwell, Furniture Village, Gower Furniture, Habitat Retail, Hammonds Furniture, Harrods, Harveys, Heal’s, Homebase, House of Fraser, Howden Joinery, IKEA Group, JB Global, John Lewis Partnership, Laura Ashley Holdings, Magnet, March UK, Mark Wilkinson Furniture, Marks & Spencer, Morrisons, Multiyork Furniture, Neville Johnson, Next, Nobia Holdings UK, Otto Versand GmbH, Reid Furniture, Sainsbury’s, Sharps Bedrooms, Shop Direct, Smallbone, Steinhoff UK Holdings, Tesco, Wren Kitchens.

Key areas covered in the report include:

THE STRUCTURE OF THE FURNITURE SUPPLY CHAIN


Structure of residential Furniture Distribution in the UK, overall market definition, size and current situation 2006-2011, recent industry performance.

Growth in imports and impact of lower cost imports on the supply chain to 2011.

Key market influences, including levels of construction, housing market, economic trends, impact of global credit crisis, short-term prospects and so on. Current retail marketing mix, focus on the manufacturing retailers and their role in the industry, comment on store layouts and design.

Future prospects – market size and forecast trends with prospects for 2012 and up to 2016.

Overall UK furniture industry market size, key drivers and recent trends.

KEY CHANNELS OF DISTRIBUTION IN THE SUPPLY OF FURNITURE

Furniture multiples – structure of the sector, how this has changed in the last 5 years, product shares 2007 and 2011, key organisations in the sector ie IKEA, DFS, Steinhoff UK Retail, Furniture Village, Dreams etc.

Furniture specialists – structure of the sector, how this has changed in the last 5 years, product shares 2007 and 2011, key organisations in the sector ie Magnet, Smallbone, Wren, Hammonds, Sharps, Neville Johnson etc.

Mail Order & Catalogue Retailers – structure of the sector, how this has changed in the last 5 years, product shares 2007 and 2011, key organisations in the sector ie Argos, Shop Direct, Otto Versand etc.

Furniture Independents – structure of the sector, how this has changed in the last 5 years, product shares 2007 and 2011, key organisations in the sector.

Department Stores & Variety Chains – structure of the sector, how this has changed in the last 5 years, product shares 2007 and 2011, key organisations in the sector ie John Lewis, Debenhams, House of Fraser, Harrods, Marks & Spencer, Next, Laura Ashley etc.

DIY Multiples & Builders’ Merchants – structure of the sector, how this has changed in the last 5 years, product shares 2007 and 2011, key organisations in the sector including B&Q, Homebase, Wickes.

Internet, Direct Sell, Off-the-Page – structure of the sector, how this has changed in the last 5 years, product shares 2007 and 2011, key organisations in the sector including B&Q, Homebase, Wickes.

Grocery Multiples – structure of the sector, how this has changed in the last 5 years, product shares 2007 and 2011, key organisations in the sector including Tesco, Asda etc.

ASSESSMENT OF THE USE OF THE INTERNET IN THE SUPPLY OF FURNITURE

Changes in access to the Internet – changing nature of Internet access, growth of mobile access etc. Internet as a research tool buying instore yet still using Internet research to improve price, or enhance product knowledge.

Purchaser profiles of online buyers and the use of social networking, advantages and disadvantages of trading online etc.


Additional Information

The UK domestic furniture market is highly fragmented and complex and was valued at an estimated £9,240m at Retail Prices in 2011. The market has moved in a volatile pattern since 2006 with sales of domestic furniture falling from £10,340m in 2006 to an estimated £9,240m in 2011, a decline of around 11%, affected by the slowdown in the housing market and falling levels of business and consumer confidence.

Other pressures within the domestic furniture market have included the rapid penetration of low cost imports from the Far East and Eastern Europe, which has driven down prices and margins. Total furniture imports account for around 35% of the furniture market, although the rates of import penetration differ significantly for different product groups.

The upholstered furniture and beds sector still continues to dominate the overall furniture market, followed by kitchen furniture with 22% of the market and dining and living room furniture with 13% in value terms.

Furniture multiples account for 48% of the upholstered furniture sector and 52% of the beds sector. Furniture multiples also dominate the dining and living room sector, as well as the bedroom furniture sector. Fitted bedroom furniture specialists are significant in that sector.

The kitchen furniture market differs from other sectors of the furniture industry in terms of the main distribution channels, with the main difference being the 35% share held by builders’ merchants.

Home office furniture currently accounts for only around 5% of the domestic furniture market, with bathroom furniture also taking a relatively minor share. DIY multiples and builders’ and plumbers’ merchants dominate the bathroom furniture sector.

Growing competition in a declining market is also reflected in the increasing number of business failures in the sector, both at manufacturer and retail level, with MFI the most significant example.

Although the Internet plays an increasingly important part in furniture sales, the majority of consumers undertake research online and then purchase in store. Whilst there are a growing number of companies operating solely through e-commerce transactional websites, the bulk of furniture sales via the Internet is directed through established furnishings retailers, using a multi-channel approach to marketing. The Internet provides an opening for new entrants and niche players, allowing smaller companies to succeed in a way that they could not have done if they had to develop a retail network.

In general, it is clear that the short term prospects for the UK economy in the next 5 years are likely to prove relatively difficult for the industry. Total sales of domestic furniture are expected to grow modestly in 2012 and 2013, before more steady growth of around 3.0% per annum in the following 3 years. Sales are forecast to reach £10,430m by 2016, compared to £9,240m in 2011, a rise of 13% in RSP value terms.
1. INTRODUCTION
1.1 BACKGROUND
1.2 SOURCES OF INFORMATION
2. SUMMARY & FUTURE PROSPECTS
2.1 SUMMARY
2.2 FUTURE PROSPECTS
3. ECONOMIC ENVIRONMENT
3.1 GDP
3.2 INFLATION & INTEREST RATES
3.3 UNEMPLOYMENT
3.4 HOUSEHOLD CONSUMPTION
3.5 HOUSING & CONSTRUCTION
3.6 STERLING
3.7 POPULATION PROFILE
3.8 CONCLUSIONS
4. THE OVERALL UK FURNITURE MARKET & HOUSING INFLUENCES
4.1 OVERALL FURNITURE MARKET SIZE AND TRENDS
4.2 CONSUMER CHARACTERISTICS AND TRENDS
4.3 HOUSING TRENDS AND DEMOGRAPHICS
4.3.1 New Housebuilding
4.3.2 House Moving
4.3.3 Household Size
5. DISTRIBUTION SUPPLY CHAIN REVIEW
5.1 STRUCTURE
5.2 RECENT CHANGES IN CHANNEL SHARE
5.3 DEVELOPMENTS IN THE SUPPLY CHAIN
5.3.1 The Current Marketing Mix
5.3.2 The Manufacturing Retailers
5.3.3 The Effects of Import Penetration
5.3.4 Store Layout and Design
6. MAJOR FURNITURE DISTRIBUTION CHANNELS
6.1 FURNITURE MULTIPLES
6.1.1 Structure of Sector
6.1.2 Key Organisations in the Sector
6.2 FITTED FURNITURE SPECIALISTS
6.2.1 Structure of the Sector
6.2.2 Key Organisations in the Sector
6.3 MAIL ORDER AND CATALOGUE RETAILERS
6.3.1 Structure of the Sector
6.3.2 Key Organisations in the Sector
6.4 FURNITURE INDEPENDENTS
6.4.1 Structure of the Sector
6.4.2 Key Organisations in the Sector
6.5 DEPARTMENT STORES AND VARIETY CHAINS
6.5.1 Department Stores
6.5.2 Variety Chains
6.6 DIY MULTIPLES
6.6.1 Structure of the Sector
6.6.2 Key Organisations in the Sector
6.7 OTHERS
6.7.1 Internet & Direct / Off-the-Page
6.7.2 Grocery Multiples
6.7.3 Builders’ Merchants
7. THE GROWTH OF THE INTERNET
7.1 BACKGROUND
7.2 INTERNET ACCESS
7.3 ONLINE RESEARCH
7.4 PURCHASER PROFILE
7.5 SOCIAL NETWORKING, USER REVIEWS AND BLOGS
7.6 ADVANTAGES AND DISADVANTAGES OF TRADING ONLINE
8. DISTRIBUTION STRUCTURE BY PRODUCT GROUP
8.1 STRUCTURE
8.2 UPHOLSTERED FURNITURE AND BEDS
8.3 KITCHEN FURNITURE
8.4 DINING AND LIVING ROOM FURNITURE
8.5 BEDROOM FURNITURE
8.6 HOME OFFICE FURNITURE
8.7 BATHROOM FURNITURE
List of Charts and Tables
Table 1: The UK Market For Domestic Furniture 2006-2016 (£m RSP)
Chart 2: Interest Rates and Inflation (CPI) from 1992-2016
Chart 3: PDI & Savings Ratio at Current Prices 1992-2016
Table 4: Exchange Rate Fluctuations 2006-2012 - Sterling To The Dollar, And The Euro, Spot Rates
Chart 5: Age Distribution of the Resident UK Population Mid-2010 (‘000)
Chart 6: The UK Market For Domestic Furniture 2006-2011 (£m RSP)
Chart 7: UK Market Mix of Furniture 2000, 2005 & 2011
Table 8: Average Weekly Household Expenditure – Furniture & Furnishings 2004-2010
Table 9: House Building Completions (Great Britain) 2006-2016 by Volume (‘000 Dwellings)
Chart 10: House Building Completions (England) 2001-2011 By Type of Dwelling - %
Table 11: Number of Property Transactions in the UK 2006-2014 (000’s)
Table 12: Average Household Size For Great Britain 1991-2016
Chart 13: Distribution Structure – Residential Furniture Market Value 2011 RSP £m
Table 14: Distribution of Residential Furniture 2007 & 2011
Chart 15: Distribution of Residential Furniture 2007 & 2011 – Furniture Multiples - Specialists and Generalists
Chart 16: Distribution of Residential Furniture 2007 & 2011 – Fitted Furniture Specialists
Chart 17: Distribution of Residential Furniture 2007 & 2011 – Mail Order and Catalogue Retailers
Chart 18: Distribution of Residential Furniture 2007 & 2011 –Furniture Independents
Chart 19: Distribution of Residential Furniture 2007 & 2011 –Department Stores & Variety Chains
Chart 20: Distribution of Residential Furniture 2007 & 2011 –DIY Multiples
Chart 21: Distribution of Residential Furniture 2007 & 2011 –Internet and Off-the-Page
Chart 22: Distribution of Residential Furniture 2007 & 2011 –Grocery Multiples
Chart 23: Distribution of Residential Furniture 2007 & 2011 –Builders’ Merchants
Chart 24: UK E-retail Market - % Share of Total Retail Sales 2007 – 2011
Chart 25: UK Households with Internet Access 2007 – 2011
Chart 26: UK Users with Mobile Internet Access 2009 - 2011
Chart 27: Online Researcher Profile by Age Category 2011
Chart 28: Internet Purchasers of Household Goods by Age and Gender 2011
Chart 29: Transactional Websites - Source of Traffic 2011
Table 30: Advantages and Disadvantages of Trading Online
Table 31: Distribution of Upholstered Furniture and Beds 2007-2011 (% of Value) Furniture Multiples, Independents, Mail Order, etc
Table 32: Distribution of Kitchen Furniture 2007-2011 Share by Value (%) Furniture Multiples, Independents, Mail Order, etc
Table 33: Distribution Of Dining and Living Room Furniture – 2007-2011 by Value Share - Furniture Multiples, Independents, Mail Order, etc
Table 34: Distribution Of Bedroom Furniture – 2007-2011 by Value Share - Furniture Multiples, Independents, Mail Order, etc
Chart 35: Distribution Structure for Home Office Furniture 2007-2011 by Value - Furniture Multiples, Independents, Office Superstores, etc
Table 36: UK Bathroom Furniture - % Channel Share 2007-2011 - DIY Multiples, Merchants, Specialists, etc

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