The overall UK office furniture market has been through a sustained difficult trading period, with the market declining substantially in 2009/10. However, it has recovered somewhat since then, with sales reaching an estimated £665m in 2013.
There is still a surplus of supply capacity over
demand, despite some well-known companies having ceased to trade, and this has
resulted in suppliers having to cut prices further to maintain share.
The two main distribution
channels for office furniture are via the dealer network, accounting for 44% of
the market, or directly to end users, with around a quarter of the market.
Retail furnishing groups and miscellaneous outlets account for 20% of the
market, whilst superstores and mail order sales account for the remaining 11%.
The office furniture dealers’ sector is extremely
fragmented with an estimated 2,000 to 2,100 branches in the UK, largely single
branch enterprises. Dealers source their furniture mainly from UK based
manufacturers, although they have increasingly used importers to supplement
their offering in recent years.
The majority of dealers source their products from
individual manufacturers and this enables them to offer a comprehensive range
of products at different price points, however, some dealers have close links
with individual suppliers, usually with the larger companies. Having good
quality products with enhanced features is the most important factor when
dealers are looking for a supplier and this is particularly true of the premium
sector, where it is important to differentiate from other distribution channels
in order to avoid direct price comparison.
The supply chain in the market is likely to experience
some changes, with further growth in the SOHO market benefiting the less
traditional channels of supply, such as multiple furnishing retailers,
superstores, mail order and the Internet in the short to medium term future.
Competition is expected to be relatively intense due to the furniture multiples
offering a wide range of flat pack products at lower prices. Growth in this
sector may entice new entrants into the market, although this is more likely to
be on the manufacturing side, rather than in the retail sector.
The dealers’ market is expected to show modest growth
in the next few years, increasing from an estimated £293m in 2013 to £318m in
2018. Although the share of the market held by dealers is forecast to decline
to 42% by the end of the period, growth in the overall market should more than
offset that decline.
Keith Taylor, Director of AMA
Research said: “The dealers’ channel is
expected to see low-level growth over the next few years, though it is expected
that their market will remain challenging. Retailers, such as IKEA, Argos and
Tesco, together with Internet suppliers are likely to be joined by other
multiple retailers and are expected to increase their share of the market using
catalogues and the Internet to support their nationwide chains of outlets.”
Furniture Dealers Market Report - 2014-2018 Analysis’ report is published
by AMA Research, a leading provider of market research and consultancy services
within the construction and home improvement markets. The report is available
now and can be ordered online at www.amaresearch.co.uk or by calling