Report Summary

Period covered: 02 February – 01 March 2025

3-minute read

Furniture & Flooring – Retail Economics Index

Furniture & Flooring sales rose by xx% year-on-year in February, marking the first uplift since August 2023, when the category recorded a xx% increase.

Growth reflects a mix of short-term promotional tactics and broader shifts in consumer behaviour.

Promotional activity and clearance events

Retailers extended post-January clearance events well into February, particularly across Furniture & Flooring categories, as they looked to clear seasonal stock and stimulate demand. This discounting strategy successfully lifted volumes but came at the expense of margins, tapping into a price-sensitive mindset rather than organic, full-price demand. Several UK-based retailers adopted this approach:

B&Q ran a "4 for 3" promotion on laminate and luxury vinyl flooring, valid through early February. This encouraged bulk purchases and helped shift stock, where consumer spend is typically more cautious during winter months.

IKEA launched a targeted offer for IKEA Family members in late February, giving 50% off up to four pillows with the purchase of a mattress. While this began at the end of the month, it demonstrates IKEA’s ongoing use of tactical promotions to increase basket sizes and move volume in home categories.

Mixed seasonal dynamics

Colder, overcast weather in early February delayed interest in seasonal and outdoor ranges, limiting the performance of new collections. However, footfall saw a modest boost during the school half term, especially for family-oriented retailers located in shopping centres (MRI Software).

Confidence rises, but so does caution

Consumer confidence climbed to its highest level since early 2022, with the GfK Major Purchase Index rising xx points in February. This signals growing appetite for discretionary purchases as real wage growth remains positive but building up savings dominate intentions. Consumers remain cautious. According to Barclays, xx% of consumers were actively reviewing their finances, switching providers, tracking expenses, and reducing discretionary spend.

Mounting cost pressures ahead

February's spending came in anticipation of cost increases across essentials in April: 1) A xx% rise in the energy price cap, adding £xx to annual bills. 2) A xx% surge in water bills, adding £xx, the steepest in two decades. 3) Council tax increases of around xx%, with higher rates in some areas.

With inflation expected to peak at xx% this summer, households are bracing for tighter budgets (OBR). Many likely dipped into savings to take advantage of promotions in February, but this support may prove short-lived as the consumer mood remains fragile.

Balancing efficiency and strategic transformation

Kingfisher’s latest results highlight how large home improvement retailers are adapting to cost pressures through efficiency, digital transformation, and a sharper focus on home-related categories like furniture and bathrooms. For the year ending January 2025, group sales dipped xx% to £xxbn, with pre-tax profit falling over xx% to £xxm. UK and Ireland sales edged up slightly, while France saw a decline.

To manage £xxm in rising cost pressures, Kingfisher is accelerating automation and reconfiguring operations. Rather than cutting staff, the business is rolling out self-checkouts, redesigning larger stores to support click-and-collect, and expanding smaller urban formats such as B&Q Local. These changes are designed to improve efficiency and keep home-related ranges easily accessible to shoppers.

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