The Home Office Furniture sector forms part of both the overall UK Office Furniture market and the overall UK Domestic Furniture market. The overall Office Furniture market was worth an estimated £911 million during 2002 with approximately 20% accounted for by the home office furniture sector. In addition, the overall UK Furniture market was worth an estimated £4.1 billion in 2002 with the home office furniture sector accounting for approximately 4.6% of sales.

The Home Office Furniture market has experienced high growth rates during the 1990s. The home office furniture market saw significant growth between 1996-2000 due to a number of underlying factors, including increasing household penetration of computers and a change in working practices, leading to more people working from home.

The home office market is also very sensitive to changes in general economic conditions. 

There was a steady growth in consumer confidence between 1995 and 1998, as well as windfall payments, which have helped to sustain this growth. Despite economic uncertainty during late 1998 and early 1999 the home office furniture market managed to achieve high levels of growth. 2000 was also a very positive year for the market with economic factors generally positive, increases in home working and PC ownership and general developments in awareness from consumers and retailers resulting in increased allocation of store floor space and more sophisticated and higher quality products.

In 2001/2002 however, growth started to slow down as a result of a number of factors including the uncertain economic climate, a lower level of consumer confidence and signs of PC market saturation. As competition increases and the home office furniture market begins to approach maturity, growth rates are expected to continue to stay below 1990's levels but still remain ahead of other furniture sectors.

In terms of the product mix, the home office furniture market is comprised of desking, seating and storage products. Home office desking is by the largest sector accounting for around 46% of the market in value terms. This sector has grown in the last two years, mainly due to strong growth in workstations. Another growth sector is seating, which has grown at an annual rate of around 15% over the last few years. Around three-quarters of all home office furniture is estimated to be of the flat packed type.

The home office furniture market is still in the growth phase of its product lifecycle, and the vast majority of sales are new purchases. However, in recent years the market has developed in terms of design and products are becoming more durable, comfortable, sophisticated and aesthetically pleasing. Therefore, a replacement market is beginning to emerge as consumers seek to replace lower value first time purchases.

Design trends are also a key area of change for the home office furniture market. As the market has grown, product choice in terms of style has widened and the market has become increasingly design-led with space, practicality, flexibility, co-ordination and ergonomics becoming key considerations. In particular, a key area of growth is the children and teens designs, due to the increase in multiple PC ownership and the increasing number located in children's bedrooms.

The supply structure for home office furniture is very fragmented and it remains difficult to distinguish market leaders at this stage. For the purpose of this report suppliers have been segmented into the following categories; Major Suppliers, Traditional Suppliers, Other UK Suppliers, Importers, and Predominantly Office Furniture Manufacturers, although there is some overlap between these categories. The major suppliers hold a share of around 49% of the market, and most of these are manufacturers that supply large retail chains such as MFI, IKEA and Argos, including The Furniture Factory and Bush Europe.

The percentage of home office furniture imported into the UK from Europe, the USA or the Far East is high. This is due in part to the fact that in order to cut costs, retailers are having products made overseas and importing the finished items as own label. In addition, the US market for home working is strong and as a result the level of imports is high from that country.

Furniture multiples continue to dominate in terms of distribution, largely due to their strength in terms of national coverage and the growth in IKEA. Multiple Office Superstores also take a substantial amount of share and catalogue/mail order sales of home office furniture has grown strongly over the last two years. Office furniture dealers have lost share and there has been a noticeable increase in supply through other retail, such as variety and department stores like John Lewis and Marks & Spencer.

A number of online retailers have emerged but so far Internet sales only account for around 1% of the market. At the moment the main role of the Internet will be as a marketing tool, with manufacturer and retailer websites acting as the first point of contact for customers, although many major retailers are starting to sell online. Also, some manufacturers are using the Internet as an efficient way to sell their products directly to consumers.

The market for home office furniture is expected to continue to grow and change in the medium term, driven by two key aspects - the growth of home computer ownership and usage by the whole family, and an increasing proportion of the workforce operating from home. The product and service requirements of each of these sectors may be different, but their simultaneous growth is expected to drive forward the market for home office furniture in the medium to longer term. 

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