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AM20091 AMA DINING ROOM AND OCCASIONAL FURNITURE MARCH 2001

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AMA Research have published the second edition of "UK Dining Room and Occasional Furniture Market Report 2001". The report incorporates original research and provides a comprehensive and up-to-date review of the market – representing a worthwhile investment and giving excellent value for money.

Product areas covered in the report include: -

DINING ROOM FURNITURE
- Tables
- Chairs
- Sideboards
OCCASIONAL FURNITURE
- Wall Storage Units, Room Dividers and Display Cabinets
- Occasional/Coffee Tables
- Entertainment Units/cabinets
- Bookcases, Shelving & bureaux

These well established markets have experienced substantial change over the last few years. The shift to casual dining, the greater use of the home for working and the increasing use of electronic products around the home, both for work and entertainment are driving change in both the dining and occasional markets.

In addition, the shift to contemporary styles, the greater exposure to new product designs through TV home improvement programmes, magazines etc has motivated consumers to spend more on their existing homes. The growth and influence of IKEA has also had an impact on the market and it is now estimated to be worth some £500m at manufacturers selling prices.

The report answers the need for both a comprehensive QUANTITATIVE review of market developments and a detailed QUALITATIVE analysis of their background reasons and future trends – essential requirements for good marketing planning.

Information is collated from a wide range of trade and other sources and not simply a collection of government statistics – data and comment is therefore specific and relevant to the markets involved.

Key Issues Covered Include

Growth and influence of home office/working.
Influence of changing distribution patterns.
Diverging trends of dining room and occasional furniture.

Key areas of coverage in the report include:

THE MARKET

Total domestic furniture market – analysis by size, forecasts to 2004.
Fitted and non-fitted furniture – dining room and occasional furniture size and share in the non-fitted furniture market.
Total dining room furniture and occasional furniture market – analysis of size by value, historical trends and forecasts to 2004, reasons and background.
Impact of consumer trends and economic factors on the dining room and occasional furniture market, reasons for the recent decline of dining furniture and likely future prospects. Analysis of the more positive trends in the occasional furniture sector.
Increase in the number of people working from home – impact on dining & occasional furniture. Review of the home office sector.
Imports and Exports size, trade balance, growth of imports, major countries involved.
Dining room and occasional furniture by type of finish – wood, metal, rattan/cane – growth of light finishers, foiled veneers.
Softwood and Hardwood – trends and future prospects.

THE PRODUCTS

Mix between dining room and occasional furniture.
Major product groups within the dining room and occasional furniture market, percentage share of the market.
Dining room furniture – reasons for recent decline, product trends within the dining room market.
Wall storage/room dividers/display cabinet – trends in product characteristics, reasons for recent growth.
Coffee/occasional tables – reasons for recent positive sales performance and product trends.
‘Entertainment’ cabinets – reasons for recent growth i.e. product development in the entertainment market e.g. satellite purchases, DVD’s, multiple ownership of certain products etc.
Bookcases, bureaux and shelving – share of market, reasons for sales trends, growth prospects.

SUPPLIERS AND DISTRIBUTION

Major suppliers, market shares, product and market positioning.
Fragmented nature of industry, number of suppliers, reasons for fragmentation, some specialist manufacturers.
Imports – major importers.
Major channels of distribution – shares by type of retail outlet, areas of growth and decline, future trends and opportunities.
Key outlets involved in the distribution of dining room and occasional furniture.

FUTURE PROSPECTS

Prospects for the dining room and occasional furniture market – major factors influencing medium term growth.
Developments in the major product and market sectors.

The report contains some 85 pages of ORIGINAL research and comment on the UK Dining Room and Occasional Furniture Industry and provides an independent and incisive view into this market.

TABLE OF CONTENTS

UK Dining Room and Occasional Furniture Market Report 2001
1.	Introduction	6
2.	Summary	7
2.1	Overall Market	7
3.	Economic Environment	10
3.1	General	10
3.2	GDP	10
3.3	Interest Rates and Inflation	11
3.4	Unemployment	11
3.5	Household Consumption & Spending	11
3.6	Sterling	12
4	The UK Furniture Market	13
4.1	Definition And Market Size	13
4.2	Consumer Characteristics	16
4.3	Housing Trends And Demographics	18
4.4	Product Mix - Overall Furniture Market	19
4.5	Home Office Furniture	22
5	The UK Dining And Occasional Furniture Market	25
5.1	Definitions	25
5.2	Market Size And Background	25
5.3	Current Trends	28
5.4	Future Prospects	30
5.5	Imports And Exports	34
6	The Products	38
6.1	Product Mix	38
6.2	Dining Furniture	40
6.3	Occasional Furniture	42
6.3.1	Wall Storage/Room Dividers/Display Cabinets	42
6.3.2	Coffee/Occasional Tables	43
6.3.3	Entertainment Cabinets And Units	43
6.3.4	Bookcases And Other Occasional Furniture	44
6.4	Dining And Occasional Furniture Materials	44
6.4.1	Material Mix	44
6.4.2	Metal	45
6.4.3	Rattan And Cane	46
6.4.4	Solid Timber And Decorative Board	46
7.	Suppliers	49
7.1	Structure	49
7.2	Market Share	51
7.3	Major Suppliers	53
7.4	Other Suppliers	55
7.5	Imports	58
8.	Distribution	59
8.1	Definition	59
8.2	Distribution Channel Shares	59
8.3	Furniture Multiples	61
8.4	Furniture Independents	63
8.5	Department Stores And Variety Stores	65
8.5.1	Department Stores	65
8.5.2	Variety Stores	66
8.5.3	Co-Operatives	66
8.6	Mail Order	66
8.7	Diy And Others	68
8.7.1	DIY	68
8.7.2	The Internet	68
9.	Key Market Influences	70
9.1	The Housing Market	70
9.1.1	New Housebuild	70
9.1.2	House-Moving Levels	71
9.2	Population Profile	73
9.3	Employment/Unemployment	75
9.4	Interest Rates	75
9.5	Consumers Disposable Income Levels And Savings	76
9.6	Households	78
9.7	Exchange Rate Fluctuations	81
10	Future Prospects	82
10.1	Dining And Occasional Market	82
10.2	Dining Furniture	82
10.3	Occasional Furniture	83
10.4	Distribution	85
List of Tables and Charts
Chart 1:	UK Dining And Occasional Market 1994-2004 - £M MSP	7
Table 2:	The UK Market For Domestic Furniture 1994-2001 (£M MSP)	14
Table 3:	Retail Sales Of Furniture Lighting Etc RSP £M.	15
Table 4:	Average Weekly Expenditure On Household Goods And Furniture By Age Of Head Of Household (£'S) 1998/1999	16
Table 5:	Size Of Households - percent Of Total 1990 To 1998	18
Chart 6:	UK Mix Of Furniture 1994 1997 & 1999	20
Chart 7:	Fitted And Non-Fitted Furniture 1999 - percent Share By Value	21
Table 8:	UK Market For Home Office Furniture 1993 - 2003	22
Table 9:	UK Dining And Occasional Market 1994-2004 - £M MSP	26
Chart 10:	UK Market For Dining & Occasional Furniture 1994-2004 At Constant 1994 Prices £M MSP	31
Table 11:	Imports And Exports Of Wooden Dining Living And Occasional Furniture 1997-2000 By Value - (£ Million)	34
Table 12:	Countries Of Origin For Imports Of Wooden Dining Living And Occasional Furniture 1999 - Market Share By Value (£ Million)	36
Chart 13:	percent Mix By Value Of Dining & Occasional Furniture 1999	38
Table 14:	The UK Market For Dining Furniture By Product Type 1999 By Value	39
Table 15:	The UK Market For Occasional Furniture By Product Type 1999 By Value	40
Chart 16:	The UK Market For Dining & Occasional Furniture By Type Of Material percent Value 1999/2000	45
Table 17:	Furniture Manufacturers By Turnover Size 1999	49
Table 18:	Major Suppliers To The Dining And Occasional Furniture Market - Share By Value 1999/2000	52
Table 19:	Distribution Of Dining & Occasional Furniture - Value Share 1999	60
Table 20:	Retailers Of Furniture Lighting And Miscellaneous Household Goods.	64
Table 21:	Housing Completions 1993-2002 Great Britain ('000)	70
Table 22:	Number Of Property Transactions In England And Wales 1993-2002	72
Chart 23:	Age Distribution Of The Resident UK Population 1998 ('000)	73
Chart 24:	Number Of Employees In Employment GB - June 1981-01 (Millions)	75
Chart 25:	Interest Rates And Inflation (RPI) From 1990-2003	76
Chart 26:	PDI & Savings Ratio	77
Table 27:	Retail Spending - Pre-Dominantly Non-Food Stores 1996-2000	78
Table 28:	Stock Of Dwellings Great Britain - 1983-2000	79
Table 29:	Average Household Size For Great Britain 1971-1996	80
Table 30:	Exchange Rate Fluctuations 1994-2002 - Dm Dollars And The Ecu To The Pound Sterling Spot Rates (End Year)	81

EXECUTIVE SUMMARY

The Dining and Occasional Furniture sector forms part of the overall UK Furniture market which consists of Upholstered Furniture and Beds, Bedroom Furniture, Kitchen Furniture, Bathroom Furniture and Home Office Furniture and was worth an estimated £3.5 billion during 1999. The overall market was dominated by upholstered furniture with a 30 percent value share. Kitchen furniture followed with a 25 percent share, with bedroom furniture and beds maintaining a 26 percent share.

The Dining and Occasional Furniture sector has gradually decreased in terms of overall market share, accounting for around 14 percent of the overall furniture market with an approximate value during 1999 of £490 million. Forecasts to 2004 estimate annual increases of around 2 percent to reach a value of £537 million by 2004.

The following chart illustrates the development of the dining room and occasional furniture market in recent years: -

UK Dining and Occasional Market 1994-2004 - £m MSP

Source: AMA Research/Trade Estimates

The chart illustrates that, as a mature sector, the dining and occasional market has tended towards gradual growth sustained over the period. During 1997 the dining and occasional market experienced 7 percent growth, supported by building society de-mutualisation dividends, a buoyant housing market and high levels of consumer confidence. Since 1997, the growth levels have slowed to 2-3 percent affected by the general economic downturn and the slowing down of the house building and house moving sectors in 1998/early 1999.

The outlook for dining and occasional furniture is slightly more optimistic, owing largely to the growing demand for certain items of occasional furniture. However, the decreasing demand for dining furniture is likely to result in low to moderate growth in the medium term for the market as a whole.

Key characteristics of the dining market are its deferrable nature and low usage in comparison to other furniture items within the home. In addition to these factors, the increasing volume of single occupancy households and the trend towards smaller room sizes have reduced the need for traditional dining suites. However the demand for smaller items of occasional furniture has increased and with greater levels of casual dining and technology in the home, the level of usage tends to be higher in the occasional sector.

Sectors of the occasional market experiencing growth include entertainment cabinets/storage, wall units/ storage units and coffee and occasional tables. The growth of home entertainment equipment and the increasing number of home computers are increasing the demand for effective storage solutions. Wall units are also becoming more popular, largely due to the variety of add-on features now available, such as doors and drawers and the emergence of modular furniture which can be used in a variety of areas throughout the home. Coffee and occasional tables also remain strong as the trend towards casual dining and ‘TV dinners’ continues.

The Home Office Furniture market was worth an estimated £144 million during 1999 and the growth of this sector has significant implications for the future of both dining and occasional furniture. The growth in the number of people working from home has resulted in the increasing use of the dining room, the least used room, as a multi-purpose area. In addition to this, demand has been stimulated for occasional pieces of furniture, e.g. shelving and storage units.

Innovation is now the key within the dining and occasional sector, particularly as pressure on space continues and the demand for functional and versatile furniture increases. The growth of self-assembly furniture will also add further pressure on the dining and occasional sector. The major reasons for this include the immediacy and convenience of self-assembly furniture and the growth in demand for modular/flexible furniture items.

The types of furniture offered in self-assembly format tend to be foil and wood veneer finished, which are less expensive than solid wood. The light to medium colour finishes will continue in popularity in addition to the increasing use of metal and glass.

International trade in the dining and occasional market has been affected by the strength of Sterling. This has led to greater import penetration of the UK market and an increasing, negative trade balance. In 1999, imports represented approximately 35 percent of the dining and occasional market, an increase of around 6 percent on the previous year.

Estimates indicate that there are approximately, 4,100 companies within the dining and occasional sector. Major suppliers include Silentnight Holdings (Silentnight Cabinets, Nathan and Parker Knoll), followed by Ducal, Ercol and H. Morris & Co. (G-Plan, Morris Furniture and Beautility).

The furniture multiples continue to dominate, largely due to their strength in terms of national coverage and the growth of IKEA. Department and variety stores have also experienced growth as a result of improved product ranges, which now include more contemporary styles attracting a wider market. Key organisations include John Lewis, Allders and Marks & Spencer.

Distribution channels such as mail order and E-commerce are also expected to increase in the long term. However, in the medium term, the main role of the Internet will be its role as a marketing tool, with manufacturers and retailer web-sites acting as the first point of contact for customers.

Major volume growth within the dining and occasional market seems unlikely in the foreseeable future. Stimulus to the future value growth of the sector is anticipated to come from consumers continuing to ‘trade up’ to better quality products, and the continuing trend to modular, versatile occasional furniture items. With consumer confidence currently under pressure, it seems likely that the market will be relatively flat in the short-term future.

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Last updated by Duncan Nottage 20th March 2001

AM20091 AMA DINING ROOM AND OCCASIONAL FURNITURE MARCH 2001

UK Dining Room and Occasional Furniture Market Report 2001

List of Tables and Charts