Report Summary

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 role by xx% YoY in August, marking its best performance since February 2022 with the category outperforming Furniture & Flooring (xx%) and DIY & Gardening (xx%).

Confidence slumps ahead of Budget

Homewares sales are being supported by households concentrating retail spending to affordable luxuries that promote strong value, with the category experiencing declining prices. Household Goods experienced xx% YoY deflation in August, improving affordability for consumers as giants such as Ikea promote lower prices.

Retailers are capitalising on declining factory gate (output) prices (-xx% YoY in September, ONS) by passing on easing costs to consumers to align with price-conscious behaviour.

As the summer season wound down, retailers were able to offer discounts as households experienced wet and cold conditions in September and prepared for the autumn season.

Additionally, the return to school and university fuelled demand for small, affordable home items such as bedding and storage solutions. Students drove demand for functional yet cost-effective home products.

This compared to other, big-ticket home-related retail categories that continued to face declining sales in September amid elevated borrowing costs and depressed confidence.

Pressure on big-ticket items

Consumer confidence slumped to -20 in September, with sentiment around making major purchases plunging 10 points in a month. Concerns about future fiscal policies stepped up as the new government warned of “difficult” decisions to come in the Autumn Budget.

The drop in confidence came despite expected cuts to interest rates and wage growth. Investors are now betting the Bank of England will lower interest rates in November, as Governor Andrew Bailey has become more optimistic economic pressures had not been as persistent as feared.

Household finances are recovering, albeit softly. Despite easing pressures on earnings growth, wages continue to outpace inflation by around 2%, as inflation hit its lowest level in over three years at 1.7% in September.

However, concerns about rising employer’s National Insurance Contributions are delaying hiring decisions until fiscal plans are confirmed in the Budget.

Housing market recovery

The housing market, which is a key determinant of future interest of home goods, is showing signs of recovery compared to lows last year.

Average house prices increased for a third month in September, up by xx% YoY, marking the strongest rate since November 2022 (Halifax) and making up ground from declines last year.

This is being driven by a decline in mortgage rates and real wage growth in recent months, supporting affordability.

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Household Goods has been in deflation throughout 2024