UK Homewares 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.
Homewares sales
Homewares sales grew by xx% YoY in August amid deflation, according to the Retail Economics Retail Sales Index.
Confidence slumps ahead of Budget
In August, the UK economy showed signs of stabilising across key indicators like inflation, interest rates, and the labour market. The Bank of England cut interest rates for the first time since March 2020, reducing the base rate from 5.25% to 5%. The central bank projects that softer inflation will continue to put downward pressure on wage and price-setting dynamics.
Consumer confidence took a significant hit in the latter part of the summer, with the GfK Consumer Confidence Index plummeting to -xx between August and September. Concerningly, the major purchase index slumped xx points as households instead consider now a good time to save money.
Prices decline amid weak spending intentions
Fragile spending intentions are leading retailers to discount to drive sales. Price cuts have now led to deflation in non-food across various inflation measures. The retail sales deflator (a measure of inflation specific to retail) among non-food stores slipped into deflation at xx% YoY in August.
Ongoing cost-of-living pressures have resulted in more cautious, value-driven spending behaviour. Consumers are prioritising essentials and looking for discounts on non-essential homeware items.
Online gap
Bricks-and-mortar retailers have witnessed a resurgence of in-store shopping following an online blip during the pandemic. Retail parks, home of Homewares retailers, experienced a xx% YoY rise in footfall in August, as post-pandemic consumers increasingly seek in-person experiences.
Although online sales were always expected to decline from their pandemic peaks, the online penetration rate is now below where we’d expect it to have been based on pre-pandemic growth rates.
Compared to expectations, annual online sales are £xxbn behind – or xx% below – where we’d otherwise expect them to be based on pre-pandemic growth rates.
Take out a FREE 30 day membership trial to read the full report.
Household Goods has been in deflation throughout 2024
.jpg)
Source: ONS, Retail Economics analysis
