RETAIL FORECASTS REPORT 2021 | BDO LLP
5
HOME (HOMEWARES, FURNITURE, FLOORING)
DIY & GARDENING
Furniture and floorcoverings has seen a resurgence since stores re-opened from late May, with DFS, ScS, B&Q and United Carpets all reporting uplifts between July and September. Despite the turbulence of the pandemic, the lack of foreign holidays, and mortgage and stamp duty reductions also gave some consumers in certain demographics more spending power. A proportion of spend also transferred online, with SCS reporting that over April and May online orders were up 78%, capitalising on the opportunity and investing in its online offering by launching a new website. However, large purchases for the home have fallen across 2020 as a whole, as consumers have become uncertain about the future of the economy, their job security and personal finances. The complete standstill of the housing market during the first lockdown also stunted growth. Moreover, compared to some other sectors, online’s relatively small proportion of revenue and the importance of stores in the shopping journey, has meant growth in the channel has far from offset store closures. Whilst significantly impacted by the shut-down of non-essential retail in lockdown and the lingering reduction in store footfall, smaller Homewares purchases have been supported by major consumer trends that emerged from the crisis – such as cooking & baking, redecoration, and working from home. Still, this is forecast to decline across 2020 as a whole, following the hiatus in the housing market, uncertain economy and limited back-to-uni spend. The prospects for Home categories for the first part of 2021 are strong, as the stamp duty holiday continues to encourage a buoyant housing market. However, if charges are re-introduced from April, then the second half of the year and beyond could prove much more difficult.
April saw DIY & gardening sales plummet, as the big DIY retailers and garden centres closed their stores. A lack of appetite for major projects is illustrated by the number of planning permission applications falling by 22% between April and June 2020 on 2019. Also the closure of garden centres in April and May, along with the perishable nature of these items, meant many of these products had to be discarded by the time centres re-opened. However, the category has gone on to perform strongly in the second part of the year, as shoppers turned to redecorating their homes and spending more time in their gardens during lockdown. Money which had previously been earmarked for commuting to work, holidays abroad and other leisure activities was instead spent on improving homes and gardens, while concerns about having tradesmen in homes led to more customers completing tasks themselves. The Garden Centre Association reported that its members’ total sales in July increased by 15.8%, while Kingfisher saw its combined B&Q UK & Ireland and Screwfix sales grow by 15.5% in May and by 25.9% in June, and now plans to open 30 new Screwfix stores in the coming months and trial four mini stores in Asda supermarkets. DIY stores and Garden centres are also exempt during Lockdown two, giving them an opportunity to capitalise on Christmas spending while other shops are shut. Beyond this, as with home categories, much will ride on how dramatically the housing market slows in the latter part of 2021.
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