This report specifically reviews developments in the market for upholstered furniture, beds and bedroom furniture. It covers furniture designed for use in the home and excludes garden furniture and contract furniture (hotels, offices, hospitals etc).

Within our definition, the UK market is estimated to be worth £2.67 billion at the retail selling price (RSP) in 1996. Whilst this is an increase of 6 percent on 1994, suggesting signs of recovery in the market, growth is minimal when inflation is taken into account. However, sales development in the second half of 1996 accelerated as consumer confidence and spending levels increased.

The UK's ageing population structure is likely to impact on all consumer markets. There is a predicted fall of 20 percent of 15-24 year olds between 1994 and 2004, with the 35-44 age group set to rise by 18 percent over the same period. Whilst this may have an adverse effect on first time buyers, who are most likely to buy a range of starter furniture, the increase in the 35-44 sector could have a more positive impact. Consumers in this latter group have, in general, higher levels of disposable income and are more likely to be at the stage of investing in higher quality furniture.

Seasonality within the household furniture market can be quite considerable, as studies of the Department of Trade and Industry (DTI) monthly indices show. In general, sales in the summer months are very poor, with winter months showing above average sales. Sales are usually at their lowest in May and June, with consumers preferring to save for summer holidays or gardenoutdoor leisure purchases. In the summer months, sales of a wide range of furniture and furnishings decline rapidly before recovering strongly in the Autumn period.

Household furniture covers a wide range of products, and its fortunes are very closely linked to the state of the housing market and the general economic situation. However, the volatility of the furniture market is more extreme than in the economy as a whole. Most furniture sales are for replacement demand and can be easily postponed in difficult economic periods. Equally, as consumer confidence and disposable incomes rise, then furniture products are major beneficiaries of consumer expenditure.

Obviously when people are moving house regularly, they are more likely to buy furniture, especially major items such as fitted kitchens, bedrooms and dining or sofa suites. With house moves so frequent in the 1980s, and with buyers making large profits on house sales and using credit facilities for home improvement and purchases, the market grew very rapidly. Inevitably, the recession that followed was severe, with many small manufactures and retailers ceasing to trade or being acquired by larger companies.

Upholstered furniture is a substantial market, estimated at £1.37 billion at retail selling prices. Products included in this sector are 3-piece suites, sofas, armchairs, sofabeds and reclining furniture. Bedroom furniture accounts for around 25 percent of our market definition, with a value estimated at £695 million, and includes both fitted furniture and freestanding ranges of wardrobes, dressing tables, bedside tables, chests of drawers etc.

Beds represent a similar market size to bedroom furniture and is estimated with a retail value of £645 million in 1996. This sector is very mature and is still around 10 percent lower than 1990 levels in real terms. Key product sectors within the bed market are divans, mattresses, bedsteads, bunks, headboards etc.

All sectors of the market declined rapidly in the early 1990s as the collapse of consumer confidence affected high value durables. Having levelled out in 1992-93, the market has slowly begun to recover, with sales in 1996 finally rising in real terms to a more significant extent.

In January 1997, MAPS commissioned original consumer research from NOP into purchasing intentions with regard to various categories of household furniture. The overall purchasing penetration figures show that consumers are more likely to buy individual items of furniture for the bedroom and have the least intention of buying a sofabed, though these tend to be specialist requirements. Over half of those surveyed do not intend to buy any furniture at all in the next 12 months, which indicates that most consumers are cautious over prospective purchases and, it should be noted, that figures for intended purchases tend to be higher than for actual purchases.

These sectors of the furniture market are highly fragmented and as such, few manufacturers can lay claim to significant market shares. The overall market is not heavily branded, with many manufacturers supplying products both under their own names and under retailer brands. Beds are, perhaps, the exception to this with some leading brand names, but in general it is furniture and furnishing retailers that generate the stronger consumer profile.

Major suppliers in the upholstered furniture sector are companies such as Christie-Tyler and Walker & Homer, both subsidiaries of Hillsdown Holdings. Other leading suppliers in this sector are Cornwell Parker, Airsprung and Buoyant Upholstery. In the beds sector, Silentnight are the dominant suppliers with Airsprung, Slumberland, Relyon, Rest Assured and Myers also leading manufacturers. Bedroom furniture is dominated by HygenaSchreiber, Silentnight, Sharps, Bernstein, Ducal, Eurospace, Stag etc.

Retailer identity is strong, as indicated above, with MFI commanding a strong identity in the furniture sector, while expanding into upholstery and soft furnishings in their 'Homeworks' outlets. IKEA are also expanding rapidly, with strong sales in bedroom and upholstered furniture, typically appealing to younger householders in ABC1 groups.

Other leading specialist retailers in this sector include DFS, Courts, Habitat, Allied, Magnet, Cantors etc, in addition to major department and variety stores. DIY multiples are strong in self assembly bedroom furniture, but are not in upholstered furniture and beds, except for limited ranges of cane furniture relating to the conservatory market.

Growth in the market is expected to be stronger over the next few years, providing the current recovery level of economic recovery is sustained and that growth in house prices and housemoving activity feeds through into the furniture market. 1997 in particular, is forecast to be strong, with medium term prospects likely to be influenced by the outcome of the next General Election. While a return to the late 1980s is not anticipated, disposable incomes are rising and, traditionally, furniture sales have benefited from this type of economic background.