Report Summary

Period covered: 02 March – 05 April 2025

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 continued its gradual recovery in March, with sales rising by xx% year-on-year, following stronger growth of xx% in February.

These back-to-back gains mark a notable shift after a prolonged period of decline, with the category having faced nearly ten consecutive months of negative year-on-year growth prior to February.

Key factors that affected this performance in March:

Gradual return in footfall and favourable weather

• March brought a boost to physical retail, with footfall up xx% month-on-month and high street visits rising xx%, helped by Mother’s Day, payday timing, and early spring weather (MRI Software). Year-on-year, footfall increased by xx%, suggesting improving shopper engagement.
• The Met Office reported the UK’s third sunniest March on record, with temperatures xx°C above average.
• But for big-ticket categories, this didn’t translate into strong sales, as households remain hesitant to commit to large purchases.

Value-driven spending and big-ticket pressures

• Consumers are increasingly favouring value, flexibility, and affordable upgrades, with spending shifting towards experiences and smaller home improvements.
• Barclays reported just xx% year-on-year growth in card spending in March, with non-essential categories like travel (+xx%), DIY & Gardening (+xx%), and Electricals (+xx%) outperforming.
• In contrast, essential spending fell xx%, and xx% of adults said they were cutting back ahead of rising April bills.
• This trend continues to weigh on big-ticket categories like furniture and flooring, where shoppers remain cautious.

• Operational costs are rising. Following the Autumn Budget, retailers face higher National Insurance and wage costs, prompting a major UK furniture manufacturer to announce a minimum xx% price rise from April.
• In this climate, value-led propositions and clear pricing will be essential to support demand amid sustained consumer caution.

Confidence Undermined by Trade Tensions

• While consumer confidence edged up one point to -xx in March, any signs of optimism were short-lived.
• According to GfK, sentiment dropped by four points in April, following the announcement of new US tariffs by President Donald Trump, which reignited uncertainty around global trade.
• At a domestic level, the UK government’s review of the Low Value Import Scheme which currently exempts goods under £xx from customs duties is aimed at levelling the playing field against low-cost overseas platforms such as Shein and Temu.
• While the move may support domestic retailers, it risks driving up prices for consumers on lower-cost goods.
• In contrast, the temporary suspension of tariffs on 89 product categories, including some household items, offers short-term relief until July 2027.
• Still, the broader policy environment remains volatile, especially for retailers dependent on global supply chains. This uncertainty is influencing consumer attitudes.
• Barclays data reveals that xx% of shoppers are concerned about the rising cost of imported goods, while xx% say they plan to buy more “Made in Britain” products.

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Real household disposable income per person to grow by just 0.5% annually over the next five years