Business

Furniture shoppers go big or stay home in the sunshine

DFS store Image copyright DFS

Homeowners are prepared to go shopping for sofas, but prefer to bask in the sunshine rather than trudge out for smaller furnishings, according to two British retailers.

Demand from house-proud householders for upmarket sofas lifted sales at DFS.

But Dunelm, known more for its duvets and curtains, saw its sales fall, as people enjoyed the end of summer instead of primping-up their homes.

One expert said people were playing catch-up after the financial crisis.

Retail analyst Richard Hyman, said: "These markets are quite cyclical and people are playing catch up after delaying spending on big tickets items."

He said that in the last few years, furniture companies have been "making up for lost time" after sales plunged.

DFS, which sponsored Team GB at the Rio Olympics, said the furniture market had now recovered from the low point reached in 2011, when households put off buying big-ticket items following the financial crisis.

Image copyright DFS
Image caption DFS says it is confident it can weather the uncertainties surrounding Brexit

But, it added that the furniture market remained 20% smaller in value than at its pre-crisis peak in 2007.

The Brexit effect

Patrick O'Brien, an analyst at Verdict Retail, said the market research company is predicting a "tough 2017" for retailers because of the sharp fall in the value of the pound following the UK vote to leave the EU.

Measures that some companies have in place to protect them against currency movements are coming to an end next year and retailers may be forced to pass on higher costs to consumers.

DFS pledged to weather the uncertainty surrounding Brexit.

Chairman Richard Baker said: "DFS has weathered many forms of political and economic turbulence during its 47 years of operating history, and I have confidence that we will continue to be well positioned despite the uncertainties inevitably surrounding the EU referendum."

DFS's annual sales rose 7.1% to £756m as orders for its high-end sofas, which includes brands such as French Connection, increased by more than a third. Shopping over the internet continued to grow, rising 15.6% over the year.

Online demand also increased at Dunelm, with home delivery sales up 17.9%.

Image copyright Dunelm
Image caption Dunelm's out-of-town locations put people off travelling in the sunshine

However, Dunelm said that "unusually warm weather" had dampened the number of people in its shops and sent its same store sales, which strips out the effect of new store openings, down 3.8% in the first quarter.

Verdict said: "The retailer's predominantly out-of-town store footprint made it vulnerable to the higher than average temperatures across the UK in July, August and September as more consumers opted to walk or cycle to their local high street or forgo shopping entirely in favour of recreational outdoor activities."

Dumelm said it was looking forward to the second quarter, which includes the Christmas and New Year period, when it will invest in extra seasonal space.

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