Furniture retailers have reported an “encouraging” start to 2024, despite concerns that subdued demand for big-ticket items would continue in the new year.
The sector took a bashing last year as shoppers pulled back on larger purchases.
When market leader DFS slashed its sales forecast last month to “reflect the weaker than expected demand” in the run up to Christmas, fears were stoked for another punishing year.
However, some sector players are feeling a little more positive after the January sales – dubbed the furniture industry’s Christmas.
Bensons for Beds chief executive Nick Collard says he is “reasonably encouraged” by its post-Christmas trading, which came in “slightly ahead” of expectations.
It follows a 6.9% jump in like-for-likes for the 13 weeks to 24 December.
“The market is still reasonably tough – there are less people shopping year on year – but I think we’re coming to the end of that,” he says.
He explains that Bensons enjoyed a “fairly strong” post-Christmas quarter last year – with sales up 7% – so to “anniversary that [this year] with virtually a similar percentage is pretty encouraging”.
Collard adds that the January sales are a good indicator for how the year will play out.
“It’s not to the point where it makes or breaks a year for us but it absolutely a bellwether,” he says.
The Cotswold Company chief executive Ralph Tucker is also feeling “cautiously optimistic” with sales following “a similar pattern to pre-peak”.
“What I’m really pleased with is that in the sale we’ve continued an improvement in margin as we clear down product in time to bring out some fabulous new ranges in February and March.”
Tucker explains that more shoppers are buying for the home again, with consumers “moving away from throwaway furniture” in favour of something longer-lasting and of higher quality.
The chief executive says the retailer’s 15-year guarantee on furniture has “really resonated with shoppers” and “really helped to drive those sales over peak trading”.
Lower prices
Despite easing inflationary pressures, price and value are still key.
Ikea, unlike most furniture retailers, doesn’t run a typical January sale but instead unveiled a new wave of price cuts at the start of last month, promising lower prices on over 1,500 products.
The retailer’s UK and Ireland CEO Peter Jelkeby said: “We know that the festive period is hard on people’s finances, and January is typically a lean time of the year for spending.
“As we look to the future, we are proud to have kickstarted 2024 by lowering a significant volume of prices, with more to come; underscoring our commitment to being on the side of those with the lowest means.”
Collard says there was “less of a concentration” of spending at the start of January and instead it has been “stretched out” across the whole month.
“We’ve extended some of our winter sale to be slightly longer than we have done in previous years to be able to make sure that we’re giving customers value right throughout January, rather than [the sale] focused upfront,” the Bensons boss says.
The Cotswold Company chose to “discount a little bit less this year” but keep its sale running for the same length of time as last year, says Tucker.
GlobalData retail analyst Emily Salter adds offering credit to customers will have “provided a boost to the sector”.
She explains that shoppers are using the payment option to buy bigger ticket items to spread the cost.
“Consumers are no longer thinking ‘oh, can I afford to spend £700 on a bed?’. They’re thinking, ‘can I afford to spend £50 a month?’, which seems a lot more appealing of an idea.”
Is January still furniture retail’s peak?
The buzz around January sales has been usurped in recent years by the frenzy surrounding Black Friday.
Collard suggests this trend is coming to an end, with sales, which he says have been a little more weighted around Black Friday in previous years, more even.
That said, he explains the Black Friday period is a “really important event” for Bensons for Bed with sales during the event up more than 5% last year.
He says the retailer extended its two week Black Friday campaign to three weeks to “get into the same spirit of customers looking for value for money”.
At The Cotswold Company, Tucker says the January sales period still tops its Black Friday event.
“Customers look forward to it. It’s a new start for the year and it’s a great time of year to get some good deals on product,” he says.
He explains the company feeds into the excitement by making sure it has “stock ready for sale so we can give customers some great promotions”.
Despite the cost-of-living crisis, the January sales are still enticing shoppers to spruce up their home and getting a bargain is more important than ever.
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