| AM20004 |
| AMA RESEARCH MARKET REPORT : BEDROOM FURNITURE MARKET JANUARY 2004 |
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BRIEF DESCRIPTION
Covering the years 1996 to 2007, this report examines the market for fitted and free-standing bedroom furniture, with analysis of market size, background and trends, household penetration levels of fitted bedroom furniture, mix by method of assembly, design styles and trends, imports and exports, brand shares, key companies and distribution shares.
COMPANIES COVERED
MFI Furniture Group, Silentnight Holdings, Homeform Group, IKEA Furniture, Group Plc, Alston Cabinets, Sharps, Stompa Furniture, Flexa Furniture Company, Gautier, Lancelot Furniture, Jay-Be, Erinwood Manufacturing, Steve Allen Originals, Bernstein Group plc, Gower Furniture, Woodberry Brothers & Haines, Kingstown Furniture Ltd, Magnet Ltd, Sypmhony Group plc, Hammonds Furniture Ltd, Crown Products, New Plan, Daval Furniture, Moores Furniture Group, Igoe Furniture Ltd, Mark Wilkinson Furniture, Eurospace Furniture, William Ball Ltd, Stompa Furniture Ltd, Flexa Furniture, Hulsta Furniture (UK), Gautier, Steve Allen Originals, Continenta, Paidi, Thuka Furniture, The Morris Furniture Group, Willis & Gambier, Bradley Furniture, Charles Barr Furniture, Andrena Reproductions, Adam Furniture Group, Charta, Consort Furniture, Nolte Mobel, Eastleigh, Furniture Company, Moffet & Sons, Artistry in Iron, Craftsman Furniture, Olympus Furniture, Alexander Furniture, Westward Europe, Corndell Furniture, British Woodwares, Erinwood Manufacturing, Mr Copperfields Furniture Workshop, Regent Pine, Lindale, Marden Furniture, Woodpecker Pine, Birch Bedrooms, Alvista Wardrobes, Mobel Designs, Harvel Fitted Furniture, Sliderobes, Stanley Doors, Spacemaker, Tvilum Scanbirk, Bernhardt, Gaston Bauwens, Stammschroer, Island Cliff, Courts plc, Furnitureland Ltd, Habitat, Great, Universal Stores, Littlewoods, Freemans plc, Grattan plc, Empire Stores Group, Next Directory, Argos, Index, Marks & Spencer, Laura Ashley, John Lewis, Allders, Bentalls, Heals, Selfridges, House of Fraser Group, B & Q, Homebase, Focus, Wickes.
EXECUTIVE SUMMARY
| The Bedroom Furniture market forms part of the overall UK Furniture Market, which was worth an estimated £4.2bn in 2003. The Bedroom Furniture sector accounts for just over 13% of the overall furniture market with an approximate value during 2003 of £546 million. Forecasts over the next 4 years estimate fluctuating annual increases of between 1-3% to reach a value of £588 million in 2007. |
| The bedroom furniture market is a mature sector, and thus has tended towards gradual sustained growth over the period 1997-2003. During 1997, the bedroom furniture market experienced high levels of growth, due, in part, to building society de-mutualisation dividends, fuelling high levels of consumer spending on big-ticket items such as furniture. The following two years saw a slowdown in growth in the market, reflecting a more stable economic environment. Growth continued during the period 2000-2001 as interest rates remained low and the housing market enjoyed a certain degree of buoyancy. These conditions helped to maintain consumer confidence and underpin high spending levels. |
| Despite weak equity markets and slow growth in the manufacturing sector, the UK bedroom furniture market remained relatively buoyant during 2002. Interest rates remained low, whilst a booming housing market and high levels of employment helped maintain growth in the bedroom furniture market of between 2-3% for the year. |
| Market activity during 2003 was subject to more uncertain trading conditions, with the Iraq war and general recession in the world economy, but consumer confidence and retail sales remained higher than anticipated in the first half of the year. Sales began to slow in the second half, hampered by the very hot weather and the interest rate rise in November. |
| The furniture market is more responsive to swings in consumer confidence, changes in disposable income and activity in the housing market. Due to the deferrable nature of big-ticket items such as bedroom furniture, there is often a lengthy replacement cycle, with purchases often seen as non-essential and delayed during financial uncertainty. |
| The bedroom furniture market continues to be dominated by the free standing sector, with market share remaining constant and estimated to be around 75% during 2003. The increase in new entrants to the homewares retail market offering flat-pack products, and the rising level of low value imports within this sector continue to affect value growth. The fitted sector accounts for the remaining 25%, but continues to be constrained by pricing pressures and is driven by activity in the housing sector. |
| Household penetration levels of fitted bedroom furniture were estimated to be around 12% during 2003, with forecasts expecting a steady rise to reach around 14% in 2007. Compared with penetration levels forecast for fitted kitchens of around 69% and fitted bathrooms of 62% in 2007, there is considerable scope for future development in bedroom furniture, as the trend towards smaller new builds in the housing sector and the shrinking size of bedrooms, require space-saving storage solutions. |
| The self-assembly sector has gained share in recent years with the introduction of IKEA, retailers such as Marks and Spencer and mail order companies such as Argos. Recent innovations in production techniques have enabled retailers to target a wider audience. The convenience and immediacy of self-assembly furniture is also a key factor. |
| The market for children's and teenage bedroom furniture appears to growing and remains a relatively large niche market, as the general enthusiasm for home improvement has extended to junior bedrooms. More larger retailers are making room for a wider selection of children's furniture within their ranges, and many suppliers are also expanding into the junior market and offering innovative products, which grow with the child. Junior consumers are often now targeted through direct advertising in children's media. |
| Bedrooms are increasingly used as multi-purpose areas, often combining home office activities. This is particularly seen with a second or third bedroom and in children's rooms, where the need to a second computer has led to increased demand for dedicated bedroom/office ranges which will fit into smaller spaces. A change in working practices has led to over 7% of the UK working population now operating from home. |
| The past decade has brought about significant changes in wooden furniture markets, with substantial fears about sustainability, tightening environmental regulations and mounting pressure for certification. Implications for the bedroom furniture market are being seen through the decline in use of tropical hardwood furniture and the use of new material combinations such as natural fibres and synthetics. Greater interest by retailers in ethical product sourcing has driven material compositions and styles of furniture. |
| International trade in wooden bedroom furniture has also been affected by the strength of the sterling, which continued the influx of value imports into the UK during 2003. |
| The trend towards clean and contemporary styles within the bedroom furniture sector continues to grow, with the popularity of light materials and finishes such as beech, cherry and light oaks taking precedence over darker ranges. The pine market has experienced a slight decline in demand in recent years, but still continues to feature well in the independent and mail order sectors of the retail market. |
| Within the supply sector, there are estimated to be just over 4,000 companies engaged in the manufacture of bedroom furniture, with established leaders such as MFI Furniture Group (Hygena/Schreiber), Silentnight Holdings and the Homeform Group (Sharps Bedrooms) continuing to take a major slice of the market with 21%, 13%, and 7%, respectively. During 2003, over 30% of the market was composed of manufacturing businesses with less than 1% value share. |
| Within the distribution sector, there has been a blurring of the traditional retail product boundaries as a number of specialist retailers such as Marks and Spencer and Laura Ashley move into associated home furnishings markets in search of growth. Department and variety stores have considerably improved their product ranges retaining a significant share of the market at 11%. The furniture multiples continue to take the largest share of the retail market with 41%. |
| Although the proportion of the population with access to a computer and the Internet has risen in recent years, the purchase of furniture online still remains a market yet to realise its full potential. Consumer confidence in the security of transactions and the inability of the customer to view and touch the product first hand conspires to restrict Internet usage for information availability and automation of customer ordering. |
| Continued interest rate rises forecast for 2004, falling house prices in certain areas of London and the South East, and general economic uncertainty, will result in relatively sluggish 1-2% growth in the bedroom furniture market over the next year with similar low growth rates forecast in the furniture market in general. This is symptomatic of consumers deferring purchase of big-ticket items during a period of economic instability. |
TABLE OF CONTENTS
| 1. INTRODUCTION 6 |
| 2. SUMMARY 7 |
| 3. ECONOMIC ENVIRONMENT 11 |
| 3.1 GDP 11 |
| 3.2 INFLATION & INTEREST RATES 12 |
| 3.3 UNEMPLOYMENT 12 |
| 3.4 HOUSEHOLD CONSUMPTION 13 |
| 3.5 HOUSING & CONSTRUCTION 13 |
| 3.6 STERLING 14 |
| 3.7 CONCLUSIONS 14 |
| 4. THE UK FURNITURE MARKET 15 |
| 4.1 MARKET SIZE AND TRENDS 15 |
| 4.2 CONSUMER CHARACTERISTICS 17 |
| 4.3 PRODUCT MIX - OVERALL FURNITURE MARKET 20 |
| 4.4 HOME OFFICE FURNITURE 22 |
| 4.5 THE UK BEDROOM FURNITURE MARKET 26 |
| 4.5.1 Introduction 26 |
| 4.5.2 Definitions 26 |
| 4.5.3 Market Background 28 |
| 4.5.4 Current Situation 28 |
| 4.5.5 Future Prospects 29 |
| 4.6 MARKET COMPARISONS 31 |
| 4.7 FITTED AND NON-FITTED BEDROOM FURNITURE 33 |
| 4.8 HOUSEHOLD PENETRATION OF FITTED BEDROOM FURNITURE 37 |
| 4.9 KEY MARKET INFLUENCES/FACTORS AFFECTING THE MARKET 39 |
| 4.9.1 The Housing Market 39 |
| 4.9.2 Inflation & Interest Rates 45 |
| 4.9.3 Consumer Spending 47 |
| 4.9.4 Population Profile 48 |
| 4.9.5 Advertising 50 |
| 5. PRODUCT RANGE 54 |
| 5.1 PRODUCT DEFINITION 54 |
| 5.2 TYPE OF BEDROOM FURNITURE 54 |
| 5.2.1 Mix Of Bedroom Furniture 54 |
| 5.2.2 Installation of Bedroom Furniture 56 |
| 5.3 STYLES OF DOMESTIC BEDROOM FURNITURE 59 |
| 5.3.1 General 59 |
| 5.3.2 Storage Solutions 60 |
| 5.3.3 Contemporary vs. Traditional Styling 62 |
| 5.4 BEDROOM FURNITURE - CHILDREN AND TEENAGERS 65 |
| 5.5 MATERIALS AND FINISHES 69 |
| 5.6 THE PINE MARKET 73 |
| 5.7 ENVIRONMENTAL CONSIDERATIONS 74 |
| 5.8 IMPORTS AND EXPORTS 77 |
| 5.8.1 Imports and Exports 78 |
| 5.8.2 UK Manufacturing 82 |
| 6. SUPPLIERS 84 |
| 6.1 SUPPLY STRUCTURE 84 |
| 6.2 MARKET SHARE 85 |
| 6.3 MAJOR SUPPLIERS 87 |
| 6.4 OTHER SUPPLIERS: 90 |
| 6.5 CONSOLIDATION AND MARKET ACTIVITY: 95 |
| 6.6 IMPORTS: 96 |
| 7. DISTRIBUTION 97 |
| 7.1 STRUCTURE 97 |
| 7.2 DISTRIBUTION CHANNEL SHARES 98 |
| 7.3 FURNITURE MULTIPLES: 99 |
| 7.4 FURNITURE INDEPENDENTS 104 |
| 7.5 RETAIL SPECIALISTS 105 |
| 7.6 DEPARTMENT STORES, VARIETY STORES AND CO-OPERATIVES 105 |
| 7.6.1 Department Stores 105 |
| 7.6.2 Variety Stores 108 |
| 7.7 MAIL ORDER 110 |
| 7.8 DIY MULTIPLES 112 |
| 7.9 OTHERS 113 |
| 7.9.1 Internet 113 |
| 7.9.2 Grocery Multiples 116 |
| 7.9.3 Consolidation and Market Activity: 116 |
| 8. FUTURE PROSPECTS 118 |
| 8.1 OVERALL MARKET 118 |
| 8.2 KEY TRENDS 118 |
| 8.2.1 General Trends 119 |
| 8.2.2 Styles & Materials 119 |
| 8.2.3 Imports and Exports 121 |
| 8.2.4 Supply and distribution market |
DIAGRAMS
| TABLE 1 UK DOMESTIC BEDROOM FURNITURE MARKET 1997-2007 - £M MSP 7 |
| TABLE 2 THE UK MARKET FOR DOMESTIC FURNITURE 1996-2006 (£M MSP) 16 |
| TABLE 3 AVERAGE WEEKLY EXPENDITURE ON HOUSEHOLD GOODS AND FURNITURE BY AGE OF HEAD OF HOUSEHOLD (£'S) 2001/2002 18 |
| CHART 4 UK MARKET MIX OF FURNITURE 1997, 1999 & 2002: 20 |
| CHART 5 FITTED AND NON-FITTED FURNITURE 2003 - % SHARE BY VALUE 21 |
| TABLE 6 UK MARKET FOR HOME OFFICE FURNITURE 1996 - 2006 £M MSP 23 |
| TABLE 7 PENETRATION OF PERSONAL COMPUTERS IN UK 1996 - 2002 25 |
| TABLE 8 UK DOMESTIC BEDROOM FURNITURE MARKET 1997-2007 - £M MSP 27 |
| CHART 9 CONSUMER DURABLES MARKET GROWTH 1990-2005 (1990 = 100) 31 |
| CHART 10 MIX OF FITTED & NON-FITTED BEDROOM FURNITURE - 2003 BY VALUE 34 |
| TABLE 11 FITTED AND NON-FITTED KITCHEN, BEDROOM AND BATHROOM FURNITURE MARKET SHARE BY VALUE 2002 37 |
| CHART 12 HOUSEHOLD PENETRATION OF FITTED BEDROOM FURNITURE 1991-2007 38 |
| TABLE 13 HOUSEBUILDING COMPLETIONS (000'S DWELLINGS) 1996-2006 IN GREAT BRITAIN 41 |
| TABLE 14 HOUSING STARTS 1996-2006 IN GREAT BRITAIN BY SECTOR ('000) 43 |
| TABLE 15 UK HOUSEHOLDS - % BY TYPE OF TENURE IN 1994, 1998, 2000 AND 2002 44 |
| CHART 16 INTEREST RATES AND INFLATION (RPI) FROM 1990-2005 46 |
| CHART 17 PDI & SAVINGS RATIO 1980-2005 48 |
| CHART 18 AGE DISTRIBUTION RESIDENT UK POPULATION 2001 ('000) 49 |
| TABLE 19 FURNITURE RETAILERS ADVERTISING SPEND - ESTIMATED MARKET SHARE BY % 2001 51 |
| CHART 20 THE UK BEDROOM FURNITURE MARKET - VALUE MIX OF RIGID/FLAT PACK 2003 55 |
| CHART 21 SELF-ASSEMBLY BEDROOM FURNITURE MARKET £ MILLION MSP 57 |
| CHART 22 MIX OF CONTEMPORARY/TRADITIONAL STYLES OF BEDROOM FURNITURE 2003 63 |
| CHART 23 MIX OF CHILDREN'S & TEENAGE/ADULT BEDROOM FURNITURE 2003 65 |
| CHART 24 MATERIALS USED IN THE CONSTRUCTION OF BEDROOM FURNITURE 2003 - MARKET SHARE % 70 |
| TABLE 25 IMPORTS AND EXPORTS OF WOODEN BEDROOM FURNITURE 1993-2003 BY VALUE - (£ MILLION) 78 |
| TABLE 26 COUNTRIES OF ORIGIN FOR IMPORTS OF WOODEN BEDROOM FURNITURE 2002 & 2003 - MARKET SHARE BY VALUE (£ MILLION) 80 |
| TABLE 27 EXPORT DESTINATIONS OF WOODEN BEDROOM FURNITURE - MARKET SHARE BY VALUE (£ MILLION) 2002 AND 2003 81 |
| TABLE 28 FURNITURE MANUFACTURERS BY TURNOVER SIZE-BAND 2003 84 |
| TABLE 29 MAJOR SUPPLIERS TO THE BEDROOM FURNITURE MARKET - SHARE BY VALUE 2003 86 |
| TABLE 30 DISTRIBUTION OF BEDROOM FURNITURE - VALUE SHARE 2003 98 |
Text © 2004 AMA Research
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Last updated by Amanda Porteous February 2004
