29 May 2024, 02:51
By Simon Williams Nov 01, 2018

How resilient is the UK bed market?

There’s no way of getting away from it – times are tough. Consumer confidence is suffering as the country stumbles from one Brexit warning to another, and the high street is littered with empty premises and big retailers downsizing and restructuring through CVAs. But how is all this affecting the UK bed market? The NBF’s marketing manager, Simon Williams, investigates …

A GfK report on consumer confidence delivered on behalf of the European Union at the end of June showed an Overall Index Score drop of two points to -9, as the pre-Brexit British public held onto their cash and seemed set on “self-imposed austerity”. 

Yet we are told there is a strong jobs market and interest rates are still very low – so why is the economic mood so gloomy?

Joe Staton, client strategy director at GfK, says: “The trend since 2015 has been resolutely downward and it’s difficult to see the direction changing in the run-up to the UK leaving the EU in March 2019.”

But how is the bed market faring against this backdrop?

According to figures from ONS UK data and HMRC, the value of Britain’s bed market rose +1.1% last year, which was boosted by a +2% increase in the value of UK mattress production to more than £544m. 

The NBF’s own figures for 2017 (taken from the NBF Tracker system of members’ sales data) showed a -1% decrease in value from 2016 to an estimated £915m at factory prices. This figure covered mattresses, divan sets, divan bases and adjustable beds, and would equate to a retail value in the region of £1.83b. 

Taking sales of mattresses on their own, NBF figures indicated revenue of approximately £580m at factory gate prices in 2017 – up by +1% on 2016. The graph pictured shows mattress-only unit sales (in red) for the first quarters of 2014-18.

However, sales of mattresses and divan sets in Q1 2018 showed a fall of almost -4% against the Q1 2017, which may be a sign of worse things to come.

In and out

One area that has seen substantial growth is the value of imported mattresses, with ONS and HMRC figures showing an increase of +16%. The biggest increase comes from Poland, up +27% to almost £29m in 2017, overtaking Denmark, which saw a -3.5% drop to just under £25m. Chinese mattress imports came next at just under £21m – a +12.5% increase on 2016.

There was some good news on the export front, with total mattress exports in 2017 at £41.6m – +12% higher than in 2016, with Ireland by far the biggest market at £12m. France was in second place at just £5.8m (up +17.6%), while exports to the US fell by -14% to £3.4m.

What are people buying?

The NBF carries out twice-yearly research exercises to identify which bed products consumers are buying. Our latest report on purchases, made between September 2017 and February 2018, showed that approaching 58% of all purchases were for mattresses on their own. 

This was compared to 55% in the previous report, which may be a clear indication of the rise in the popularity of the mattress-in-a -box companies such as Eve and Simba. 

When the NBF started its consumer research back in 2015, roll-up mattresses only accounted for 10% of sales by volume. This has risen steadily each half year, and accounted for over 17% in our last report. Despite Eve’s recent woes, there seems little doubt that this sector is here to stay – the market disrupters have certainly shaken up the sleepy mattress industry, and have given beds and sleep a cool, trendy makeover.

It would also appear that the traditional divan set is on the decline in favour of bedsteads, with the under 55s driving this trend. Mattresses sold with bedsteads accounted for a quarter of all bed purchases, with divan sets at 17% – down from 24% in H1 2017.

Encouragingly, our research shows that the replacement cycle is just over seven years, which follows our general advice. However, further investigation indicated that 37% of the sample changed their mattress in less than five years, with an alarming 58% of the under-35s doing so. Is this a sign of the throw-away society that we now live in?

Gazing into the crystal ball

So what’s going to happen in the remainder of 2018 and beyond? In May, economist Roger Martin-Fagg, in the latest of his economic updates for the NBF, predicted that “UK retail should have an improved H2 – better weather, plus real growth in incomes, should drive consumption.”

But has the bed market remained resilient – or has it started to sag?

He also had a warning about Brexit negotiations, saying: “My take on this is that [Theresa] May is playing for time with a divided cabinet. The result will be an extension of the transition period beyond 2020. The EU will welcome this, because we will continue to pay our subscription!

“Anecdotal evidence suggests that UK businesses with most of their exports going to the EU are increasing their EU presence by creating new capacity within the region. This is a sensible move in case we crash out, which is still a possibility.”

Is it time to switch off the light and pull the duvet over our heads – or will the UK bed sector slowly recover like memory foam, or even bounce back, like a coiled spring?

This article was originally published in Bed Buyer 2018 in September.

Image: iStock.com/urbancow

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