Report Summary

Period covered: 03 August - 30 August 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 sales rose by xx% year-on-year in August, reversing the xx% decline recorded a year earlier.

The improvement points to a sector beginning to stabilise after a challenging period, but sales remain below the three-month average.

Key drivers

Retailers benefitted from seasonal clearance activity and improving confidence in home-related spending.

Sofas, dining furniture, and mattresses saw steady demand, supported by promotions and finance offers.

Flooring gained momentum as households prepared homes ahead of autumn, though buyers remained price-sensitive and leaned towards value ranges and mid-market products.

A “lipstick effect” was visible in home spending: many households deferred large purchases but still committed to smaller upgrades that refreshed interiors without straining budgets.

This trend played to categories like occasional furniture and modular pieces, where entry-level price points enabled purchases to proceed.

Category performance

Living room furniture performed relatively well, driven by sofas and seating. Mattresses were also popular where promotional campaigns drew strong response. Flooring retailers reported firmer volumes, with carpets and laminate benefiting from seasonal fitting ahead of colder months. Kitchen and bathroom purchases remained steadier, with spending directed toward incremental upgrades rather than full refits. Decorative items and lower-ticket storage units acted as accessible purchases for cost-conscious households.

Housing market

The stabilising housing market provided a modest tailwind. Halifax reported average house prices at £xx0 in August, up xx% month-on-month and xx% year-on-year. Transaction volumes were up xx% on last year, giving furniture and flooring retailers a firmer base of new-move customers.

Regional variation remained clear: northern regions and Northern Ireland led price growth, while London and the South saw only marginal gains. Affordability pressures persisted, with average mortgage rates just under xx%. This encouraged some households to invest in existing homes rather than move, prompting targeted upgrades and discretionary spending on interiors.

With supply of homes for sale higher than a year ago, a pipeline of activity exists, though uncertainty around potential property tax changes in the Autumn Budget may temper demand later in the year.

Footfall patterns

High streets and regional centres benefitted from summer events and tourism, helping furniture showrooms recover traffic. MRI reported a xx% year-on-year rise in high street footfall in August, although retail parks, key destinations for larger home stores, were weaker at -xx%. Retailers bridged the gap through digital-first browsing journeys, with many customers researching online before visiting stores to complete big-ticket purchases.

Outlook

Furniture and flooring is showing early signs of recovery, helped by stabilising housing transactions and a gradual lift in real incomes. Clearance sales and promotions have underpinned growth through summer, but the test will be whether momentum can carry into the quieter autumn months.

Retailers will rely on financing packages, bundled promotions, and targeted marketing to convert browsing into purchases. With consumer confidence fragile and the Autumn Budget looming, the risk of delayed or deferred spending remains high. That said, the sector is in a stronger position than a year ago, with improving housing activity offering a modest but welcome tailwind.

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Furniture and household equipment inflation ticked up to 0.8% YoY in August, from 0.7% in July