Current UK market

We operate in both the furniture and flooring markets, and there are a number of factors influencing both markets that may impact the business. These factors range from general consumer confidence levels to momentum in the housing market, and can also include challenging weather conditions, which affect store footfall.

Both of our core markets are heavily influenced by similar key factors:


Both of our core markets are heavily influenced by similar key factors:

Consumer confidence:

Big ticket sales are usually heavily affected by consumer confidence, which reached new lows as COVID-19 impacted worldwide. GfK reported that, following the significant hit to confidence experienced during the pandemic, current expectations for consumers’ personal financial situations for the coming 12 months are holding up and this positivity bodes well for the economy going forward. Consumer confidence as reported in the GfK Consumer Confidence Index recovered to -8 in August 2021, significantly above the low of -36 in June 2020, and only slightly behind the level seen in February 2020, pre-pandemic. Positively, within the survey, the ‘Major Purchase Index’ was 22 points higher in August 2021 than it was in at the same point in the prior year.

Housing market

A house move triggers the purchase of new flooring and furniture for many of our customers. Since a peak in 2016 (the highest number since 2007), housing transactions have continued to fall each year, with the lockdown-impacted 2020 hitting the lowest level since 2012, 15.7% down on the 2016 peak. Despite the lockdown in early 2021, pent-up demand for house moves supported by the extended stamp duty reduction, as well as wider behavioural shifts as people re-assess their housing needs, have encouraged a significant recovery in the market, with housing transactions to August 2021 74.4% above the same point in the prior year. With the temporary stamp duty reduction being phased out in September 2021, and a high volume of Q4 2020 transactions, it is likely housing transactions will slow from these levels.

Consumer credit

Although we have noted a slight decline in the use of finance post-pandemic, with nearly half of our customers choosing to utilise our finance options to pay for their products, the availability of consumer credit helps facilitate sales, and provide opportunities for upselling. The impact of the pandemic has seen a significant impact on the net consumer credit lending to individuals, with a fall of 1.9% in 2020, the first fall since 2012. 2021 has continued, and accelerated, this trend, with a 5.9% fall in lending to date. The decrease noted appears to be consumer led, potentially linked to increased savings or a desire to avoid additional debt. The approval percentage of those requesting finance to purchase with us remains in line with prior years.

Our advantages in the market

We have a differentiated value-focused positioning in our markets and a continued reputation for providing our customers with products at a leading range of entry to middle price points. We have a clear view of our core customer demographic, which consists of a broad population of aspiring homemakers, families and retired couples.

We continue to grow our online business significantly, and our new growth plan includes increased digital investment to improve our omnichannel offering. Our core model has had continued success and we will continue to expand and modernise our ranges and brands. As the economic recovery continues, we will also invest in improving our brand perception, awareness and consideration to broaden our customer base.