Report Summary

Period covered 02 August – 29 August 2026

3 minute read

Note: This report summary is one or two months behind the current month as standard reporting practice. The content is indicative only and incomplete with certain data undisclosed. Become a member to access this data or take out a free 30 day membership trial now.

Furniture & Flooring , Retail Economics Index

Furniture and flooring sales increased by xx% year-on-year in August, below the xx% growth recorded in the same month last year. The category remained one of the weaker areas of retail, with spending on larger household purchases struggling to gain pace after an extended period of pressure on the housing market and household finances.

August's performance is particularly weak when set against the wider retail market, where sales increased by xx%. Furniture and flooring purchases tend to involve greater financial commitment than many other retail categories, and the conditions that normally encourage that spending remained difficult. Mortgage approvals fell again, borrowing costs remained high and housing transactions were subdued, limiting one of the most important sources of demand for furniture and flooring.

Key trading themes and drivers

Housing activity remains weak: The housing market remained a constraint on furniture and flooring demand during August. Mortgage approvals fell to xx in July from xx in June, their lowest level since January 2024 and around 15% below the level recorded a year earlier. Fewer housing transactions mean fewer moves and, in turn, fewer occasions when households need to furnish, redecorate or replace flooring across an entire property.

Borrowing costs remain high: Borrowing costs are also still restrictive for households that are moving or considering larger home projects. The effective interest rate on newly drawn mortgages increased to xx% in July from xx% in June, its highest level of 2026, adding to the cost of buying a home. House prices offered little encouragement either, with Lloyds recording a xx% annual decline in August, the first fall on its measure since November 2023.

Household finances under pressure: The wider pressure on household finances has become harder to ignore as summer ends. CPI inflation rose to xx% in August; regular wage growth slowed to xx% and payrolled employment fell by an estimated xx during the month. Furniture and flooring competes for the portion of household budgets left after essential spending, and the narrowing gap between wages and inflation leaves less additional income available for purchases that can often be postponed.

A sofa, dining table, bed or new flooring can remain on a household's wish list for considerably longer when finances are under pressure, particularly when mortgage costs and other essential bills are already taking a larger share of income.

Hot weather: August's prolonged hot weather also offered the category little of the seasonal support enjoyed elsewhere in retail. Spending associated with the heat was concentrated more heavily in food and drink, health and beauty, cooling products and outdoor categories, giving consumers few immediate reasons to bring forward furniture or flooring purchases during the month.

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Inflation is set to rise further