UK Furniture & Flooring Sector Report summary
September 2024
Period covered: Period covered: 28 July – 24 August 2024
3 minute read
Note: This report summary is one or two months behind the current month as standard reporting practice. The content is indicative only and incomplete with certain data undisclosed. Become a member to access this data or take out a free 30 day membership trial now.
Furniture & Flooring – Retail Economics Index
Furniture & Flooring sales experienced a xx% year-on-year decline. This decline was notably higher than the 12-month average decline of xx%.
Cautious spending across Furniture & Flooring is being driven by a multitude of factors explored below:
Declining consumer confidence: Consumer confidence plummeted by seven points in a month to xx in September, reversing the trend of recovery earlier this year as households become wary of the direction of the new government’s fiscal policy. This has led to a drop off in perceptions about personal finances and the economy.
Prioritisation of spending outside of retail: Across retail sales measures in August, there was notable pressure on big-ticket spending. Spending on Home Improvements and DIY dropped by xx% YoY, while spending on Furniture Stores declined by xx% (Barclays).Instead, consumers continued to spend on experiences, prioritising leisure and entertainment over discretionary purchases for the home this summer.
Housing affordability concerns: The reprioritisation of spending comes as housing costs remain under pressure. This includes a rising percentage of income spent on rent, reaching nearly 30% in July, putting significant pressure on the disposable income of renters. Meanwhile, mortgage rates remain elevated, averaging xx% for two-year fixed mortgages in August (Moneyfacts).
Weak recovery in real wages: Importantly, with inflation at xx% in August, wage growth is outpacing inflation, with regular earnings rising by xx% annually from May to July. However, despite this real-term improvement, the modest increase in real wages hasn't fully translated into higher spending amid economic uncertainty.
Take out a FREE 30 day membership trial to read the full report.
Household Goods prices have been in decline throughout 2024
Source: Retail Economics, ONS, seasonally adjusted
