26 May 2024, 03:08
By Anthony Creaby Jan 09, 2017

No rest for the furniture market in Q3 2016

GfK’s homewares report offers valuable insight into today’s retail landscape. Each quarter, Furniture News presents a summary of the researcher’s findings, tracking sales trends across key subsectors – here, Anthony Creaby describes the mixed picture across Q3 2016 …

We’re now in a perfect position to review the performance of Q3. At a total furniture market level we witnessed a value decline across July to September of -3.6% compared to the same period of 2015. If we readjust our view and look at the market performance over the year, we see a much smaller difference of -0.9%.

Interestingly, the volume performance is very different to this. For the third quarter of 2016 we witnessed volume growth of 2.4%, and when analysing the longer-term – back to January 2016 – an increase of 5.5% has been achieved. This leads us onto the reduction in average selling price, where declines of 5.9% for the latest quarter and over 6% for the year to September have been witnessed.

When drilling a bit deeper into the data, it is clear to see that September has significantly struggled to keep up with both July and August. Value sales and average selling price were both down 5%, and volume itself was flat. To try to understand this further it is prudent to investigate the areas which are driving this.

In September alone, the high-value sector of two-seater sofas has declined 10%, and the dining table market has fallen by 6.3%. Corner sofas did provide some respite, showing small growth, which is likely to have been helped by the significant reduction in average selling price. However, in summary, September didn’t perform as well as some may have expected.

If we interrogate some of the other furniture sectors at a third quarter view it is apparent that we do have some green shoots coming through from a handful of areas. The main ones of note are console tables, headboards and also mattresses – the latter having achieved 11.5% value growth in Q2, now followed by a 4.7% increase and volume up approximately 30,000 units. This performance in such a high-value sector is most encouraging!        

Bedroom furniture continues to be the highest value sector of the overall furniture market. This has, however, seen one of the largest value declines of -3.5%. The key sectors behind this are divans (-13.1% in value, -13% in volume) and beds excluding divans (-4.8% in value and -4.5% in volume).

As witnessed in previous quarters, and touched upon in my Q2 article, we are still seeing a positive volume picture for this sector as a whole, up +5.1%. This is further supported by the continued reduction in average selling price, now down 8.2% versus the same three-month period in 2015.

I was looking forward to analysing the third quarter performance in the furniture market, and I am slightly disappointed we haven’t seen a more positive picture. I was expecting a stronger performance in September at a total furniture level. I do expect this picture to be more encouraging when I write my Q4 piece, and am very keen to assess this performance.      

A final – yet very exciting – development that we have been able to include into our reporting now is the split between online and offline sales. Implemented in April, it is still in its infancy, but the view for the three months ended September 2016 is that 35% of total furniture sales were completed online. The online peak is within upholstered furniture, where over 52% of transactions took place online, and the lowest online share was achieved in kitchen furniture (5%).

These findings are derived from the GfK Homewares Reporting, GB market. All data relates to Q3 2015 and 2016, unless otherwise stated. Anthony Creaby manages British retail homewares coverage at global data analyst GfK, which employs around 13,000 market researchers across more than 100 countries.

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