Countries covered: United Kingdom
In this section of the report we draw together and summarize the main findings from the current research project, including a general assessment of recent years from the viewpoint of the furniture industry.
The research findings indicate that total domestic furniture sales reached £4810m in 2008, a 4% decrease on the level of £5010m achieved in 2007. Apart from a small decline in 2005 the furniture industry had shown steady growth in the period from 2000 to 2007. It should be remembered, however, that imports have been taking a larger share of the UK market over this period.
As far as kitchen furniture is concerned until 2008 there had been modest increases in both volume and value terms in the period since 1999, even increasing sales in 2005 against the trend for domestic furniture generally. Nevertheless, competition has remained fierce throughout the industry and this period had seen significant restructuring at MFI, before the retail division went into liquidation, followed by BGH, both major suppliers of kitchen furniture. In addition, several smaller companies have also gone into receivership.
The emphasis within the furniture industry has moved consistently from manufacturing to retailing over the last decade, although within the kitchen furniture sector, companies such as Magnet, Smallbone, Poggenpohl and in the past, MFI, have combined both functions. Until recently the importance of the DIY and contract sectors meant that the major kitchen furniture manufacturers supplying them were accounting for a growing share of the market. However, changes in suppliers together with continuing price competition at the retail level have shaken a market showing only modest growth. Despite this there have been new manufacturers and retail groups keen to enter the market, a fact which only serves to fuel the competitive nature of the market.
The main findings from the survey are as follows:-
- 2.1 Total sales of domestic furniture reached £4810m in 2008, compared to £5010m in 2007 and £4950m in 2006. Total industry sales declined by 4.0% in 2008, with producer prices increasing by around 3% during the year.
- 2.2 Total sales of kitchen furniture reached £1080m in 2008, compared to £1130m in 2007 and £1115m in 2006; this product group currently accounts for 22% of the total domestic furniture market.
- 2.3 In volume terms the total number of fitted kitchen furniture installations had increased slowly in the period to 2007, reaching 1,071,000 units in that year, compared to 1,050,000 units in 2006 and 1,023,000 units in 2005, before declining to 994,000 units in 2008, a fall of around 7.2%
- 2.4 Sales of built-in units, mainly base and sink units, moved from £530m in 2005 to £555m in 2007, before declining to £530m in 2008, whilst sales of storage furniture, mainly wall units increased from £480m to £485m in 2007, before falling to £465m in 2008.
- 2.5 The research findings indicate that until 2006 volume sales of kitchen units were at their peak in 1988 when around 13m units were installed. Sales then grew to reach 13.4m units in 2007, compared to 13.2m units in 2006 and 12.9m units in 2005, before declining to 12.4m units in 2008.
- 2.6 Kitchen specialists account for 19% of the total market in volume terms, but 40% of the market in value terms, with independent specialists claiming 14% in volume terms and 32% in value terms. Builders’ and plumbers’ merchants have a 22% share in volume terms, but a reduced 15% in value terms and the reclassification of Howden Joinery into this category has significantly increased the share of the market held by such outlets. DIY outlets account for 18% of sales volume, but 13% of sales value, whilst the direct contract sector accounts for 16% of volume sales and 13% of sales value. The leading kitchen furniture retailers are now B & Q and Magnet, although Howden Joinery is a major supplier in this sector, but only sells to the trade.
- 2.7 The private sector of the market accounts for the majority of sales of kitchen furniture with 90% of the total market in value terms. Existing dwellings in the private sector continue to provide the main source of demand with 75% of the total market, with the new build sector accounting for 18% of the total.
- 2.8 Galiform plc (formerly MFI UK Ltd) is the leading manufacturer of kitchen furniture in the UK, with the bulk of output being supplied to Howden trade outlets and until the end of 2007 on a contractual basis to MFI retail outlets. Other leading kitchen furniture manufacturers include Nobia Holdings UK Ltd (Magnet Ltd and Gower Furniture Ltd), The Symphony Group plc and Moores Furniture Group Ltd.
- 2.9 Imports of kitchen furniture totalled £188.1m in 2008, compared to £161.7m in 2007 and £115.3m in 2006. The penetration rate for such products within the UK market is currently 17.4% in value terms. Alno (UK) Ltd dominates this sector of the market.
- 2.10 Total sales of kitchen furniture are expected to decline to £975m in 2009 and to £955m in 2010, before increasing marginally to £975m in 2011 and £1005m in 2012, compared to the level of £1080m achieved in 2008. This product group will account for around 22% of the total domestic furniture market in value terms during the period under review.
- 2.11 Total kitchen furniture installations are expected to fall to 882,000 units in 2009 and to 854,000 in 2010, before showing very modest gains to 862,000 units in 2011 and 880,000 units in 2012; this compares with the level of 994,000 units achieved in 2008.
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- 1. INTRODUCTION
- 1.1 Background to the research
- 1.2 Terms of reference
- 1.3 Methodology
- 1.4 Research parameters
- 2. SUMMARY OF FINDINGS
-
- 3. THE UK ECONOMY
- 3.1 General economic appraisal
- 3.2 Consumers’ expenditure on household goods
- 3.3 Housing construction
- 3.4 Conclusions
- 4. MARKET SIZE AND STRUCTURE
- 4.1 Introduction
- 4.2 Past and present market size
- 4.3 The market by product group
- 4.4 The market by product type
- 4.5 The market by distribution outlet
- 4.6 Geographical distribution of the market
- 5. THE MARKET BY BUILDING SECTOR
- 6. MAJOR MANUFACTURERS AND SUPPLIERS
- 6.1 The market leaders
- 6.2 Other important manufacturers
- 7. THE THREAT FROM IMPORTED FURNITURE
- 7.1 Analysis of import penetration
- 7.2 Leading importers of kitchen furniture
- 8. THE FUTURE FOR KITCHEN FURNITURE
- 8.1 The outlook for the UK economy
- 8.2 Market forecasts
- APPENDICES
- I Boundaries of the Standard Regions
- II Summary of interviews carried out
- III Definitions of product groups within the furniture industry
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- List of Charts and Tables
- Chart 1 - Share of total sales of domestic furniture by product group
- Chart 2 - Total volume sales of kitchen furniture installations
- Chart 3 - Proportion of total sales of kitchen furniture by distribution outlet
- Chart 4 - Total imports and exports of kitchen furniture
- Table 1 - Total gross disposable income in the UK and the personal savings ratio
- Table 2 - Total household final expenditure in the UK
- Table 3 - Total sales through retail outlets in Great Britain
- Table 4 - Comparison of furniture sales in terms of Retail and Manufacturers’ Selling Prices
- Table 5 - Total sales of domestic furniture by product group
- Table 6 - Share of total sales of domestic furniture held by product group
- Table 7 - Index of producer prices for domestic furniture
- Table 8 - Total volume sales of kitchen furniture installations
- Table 9 - Total sales of kitchen furniture by product group
- Table 10 - Share of total sales of kitchen furniture held by product group
- Table 11 - Comparison of fitted kitchen sales volumes and values
- Table 12 - Total volume sales of kitchen units
- Table 13 - Total volume sales of kitchen doors
- Table 14 - Total volume sales of kitchen doors by type of unit
- Table 15 - Total sales of kitchen furniture by product type
- Table 16 - Total volume sales of kitchen doors by type of material
- Table 17 - Historical comparison of sales of kitchen doors by type of material
- Table 18 - Total sales of kitchen furniture by distribution outlet
- Table 19 - Geographical location of dwellings in the UK and the location of sales of kitchen furniture
- Table 20 - Total number of permanent dwellings completed in the UK by sector
- Table 21 - Total sales of kitchen furniture by building sector
- Table 22 - Total imports and exports of kitchen unit furniture
- Table 23 - Total imports of kitchen unit furniture and proportion of the total kitchen furniture market
- Table 24 - Forecasts for the UK economy
- Table 25 - Forecasts by the Treasury
- Table 26 - Estimated future size of the UK domestic furniture market
- Table 27 - Estimated future size of the kitchen furniture market by product group
- Table 28 - Estimated future volume sales of kitchen furniture installations
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