The bedroom furniture sector is forecast to grow by 2% in 2016/17, according to a new report from market analyst AMA Research.
After strong growth during 2014, the market grew by a modest 2% during 2015, with a similar rate of growth forecast for 2016/17.
Factors supporting this growth have included an improvement in the housing market, higher consumer confidence levels and a surge in imports in 2014, with China, Vietnam and Poland responsible for much of this increase.
“Most of the future growth within the bedroom furniture sector is expected to come from the fitted furniture sector and also the lower end of the market, driven by companies such as Ikea, Argos and Tesco focusing on affordability and innovation supported by a wide distribution network,” said Keith Taylor, director of AMA Research.
“The market remains highly competitive and smaller independent retailers will continue to feel both economic pressures and a threat from national retailers.”
Prospects for the next five years are likely to remain mixed for the overall furniture industry, with forecasts showing modest volume growth in the shadow of an exit from the EU and its economic consequences. The bedroom furniture market is also forecast to show some growth in the next few years, albeit at a slower rate than the overall furniture industry and is estimated at around 2% to 3% a year in value terms.
A number of underlying factors are influencing sales of domestic bedroom furniture, the report continued, including a greater number of smaller households, a continuing demand for new housing and a new generation of children and teenagers, who require more than just a bed and a cupboard, but a more complex arrangement of storage solutions to cope with their increasingly technological environment, incorporating laptops, televisions, DVD recorders, Xboxes etc.
Storage remains a key issue for most UK householders and the demand for practical storage solutions, as well as modular and fitted products and sliding wardrobe systems, has also grown in recent years. In addition, there is an increasing focus on flexible and multifunctional furniture that can be used to maximise space.
In addition, the shift to the private rented sector has also influenced the nature of the buying population for bedroom furniture. The rental market has nearly doubled since 2002, and continued growth in this sector seems likely to increase the proportion of the buying population focused on lower-cost products, particularly short- to medium-term tenants, and landlords.
Factors that have had a negative impact on sales of bedroom furniture include an increase in home working, which can place pressure on bedroom living space within the dwelling, and price erosion. While the rapid penetration of low-cost imports from the Far East and eastern Europe has driven down prices and margins in most sectors of the furniture market, the import penetration level is at its highest in the bedroom sector.
Competition has intensified in the retail sector in particular, where the leading established players have seen grocery multiples gain share through the adoption of ‘click and collect’ business models, and online specialists becoming more significant.