Large potential customer base
DFS has a specialist focus on the retail upholstered furniture segment which accounts for over two thirds of the living room furniture market. The UK living room furniture market was estimated by GlobalData to be valued at just over £4.5 billion in 2016. We also offer a selected range of beds, dining and other furniture giving access to other segments in the market.
Clear leader in the segment
DFS is the clear leader in the living room furniture market estimated by GlobalData to hold an 18.3% share by value in 2016.
We see three broad categories of companies actively competing in the living room furniture retail market:
- Specialist Chains such as DFS, ScS, Harveys, Sofology, Furniture Village and Oak Furniture Land / Sofastore;
- Independents that are typically single store operations;and
- General Merchandisers such as Ikea, John Lewis, Next, Argos, Debenhams and all other retailers including DIY chains and supermarkets.
New furniture will be located at the heart of a customer’s home for a number of years. As a result, most customers will perform significant research and typically visit multiple retailers in order to find the right products for them. This depth of research often encourages customers to prefer to choose to purchase from Specialist Chains and Independents that have the specialist sales staff and breadth of product range to appeal to the broadest range of customers.
This trend can be seen in the combined market share of these two categories now accounting for approximately two-thirds of retail sales and having grown from 2010 to 2016.
Steady growth trends over long-term periods
Between 1995 and 2016, the UK upholstered furniture segment of the furniture market has
grown by 2.9% per annum on a compound annual growth basis, driven by a c.7 year replacement cycle and underpinned by demographic trends.
Although the outlook is uncertain and the trading market in the first half of calendar year 2017 has been challenging, current levels of consumer confidence still remain significantly above those seen during the financial crisis and the number of housing transactions and the rate of consumer credit growth have not as yet changed markedly.