With consumers cutting back on discretionary spend and taking less interest in home improvement, the homewares market is suffering. By the end of 2010 the market will have shrunk by 1.9%, resulting in a decline of £652m since its peak in 2008. With the robust growth of the last decade over, retailers will have to work harder to attract spend.
Levels of consumer confidence and activity in the housing market have improved, but not to levels where they will boost spending on homewares significantly. With the homewares market seeing either no growth or slow spending increases for the foreseeable future, to increase sales, retailers will have to gain share from competitors.
The departure of Woolworths, Rosebys and The Pier from the market during late 2008 and the beginning of 2009 has lessened the impact of the decline in the market and allowed the survivors to up their share. However, without similar failures they could find 2010 much harder, with a return to declining like-for-like sales highly probable.
According to a recent report from Datamonitor, the homeware market shrunk by 3.9% to £10.9bn in 2009. The report claims that those retailers with distinctive positioning will succeed, as the online market for home product purchases begins to shake up dynamics. The supermarkets have enjoyed growth in this sector this year, and Argow remains the leading homeware retailer brand in 2009, with John Lewis in second place with 5.2%. Dunelm Mill is the biggest gainer in 2009, as more retailers add spin-off homeware stores.
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