Furniture Retailing - Germany - July 2008

SUMMARY

Abstract

This report series covers the five leading economies of Western Europe. The furniture sector is a difficult one to analyse, mainly due to the fact that even these large economies still have very fragmented markets. Smaller specialist players still have an important role to play and make up more than 50% of the furniture sector in the markets we have covered. Furniture is a difficult sector in which to build up significant economies of scale (without going down the IKEA flat pack route), a fact that has protected the independents. However, the arrival of non-specialists and the impact of the successful chains is sure to lead to a greater degree of consolidation in the future.

We have provided profiles of the largest furniture chains in Europe. Smaller profiles have also been provided on other significant players involved in these five markets.

The subject of this report is furniture retailing, however due to the increasing convergence of furniture with other complementary sectors such as electricals and DIY, there are very few large players that now focus on the provision of furniture alone. We have provided information on players that achieve the majority of their turnover from the sale of furniture, so mixed goods retailers such as the grocers or department stores are referred to but no firm coverage is provided of them.

While our spending figures refer to all spending on furniture, retail sales figures are more difficult to separate. In France for example, the retail sales figure for furniture retailers' sales is actually higher than consumer spending in the sector. This can be attributed to the aforementioned sector blending that is seeing more and more furniture specialists expanding their offer into related fields.

The furniture sector is facing major challenges:

• Softer housing market in many countries is reducing the desire to invest in the home and add value.
• Economic issues are undermining consumer confidence leading to greater reluctance regarding the purchase of big-ticket furniture items.
• Specialists are facing greater competition from department stores, grocers and even some clothing retailers.

TABLE OF CONTENTS

Table of Contents

• Market in Brief
• Fitful recovery
• Gloomy outlook
• Little enthusiasm for the home
• The big get bigger
• Fragmented market
• Report Scope
• Technical notes
• Financial definitions
• Currencies
• VAT
  • Figure 1: Europe: Standard VAT rates, 2007/08
• Other abbreviations
• Broader Market Environment
• Positive factors
• Negative factors
• Population
  • Figure 2: Germany: Population trends, 2002-07
  • Figure 3: Germany: Population, by age group, 2006, 2010 and 2015
• Economic recovery
  • Figure 4: Germany: Gross domestic product, 1996-2007
• Inflation in check
  • Figure 5: Germany: Consumer prices, 1999-2007
• The Market in Context
• Minimal spending growth
  • Figure 6: Germany: Consumer expenditure, 1997-2007
  • Figure 7: Germany: Consumer spending on selected categories, 2003-07
  • Figure 8: Germany: Spending on furniture as % all retail sales, 2003-07
• Housing
• Depressed market with little chance of raising prices
  • Figure 9: Germany: Consumer prices, change in furniture and carpets, 1998-2007
• Channels of Distribution
  • Figure 10: Furniture and carpets: Estimated channels of distribution, 2007
• Sector Size and Forecast
• Key findings
• Retail sales
  • Figure 11: Germany: Furniture retailers sales, 2003-12
• Enterprise and outlet data
  • Figure 12: Germany: Furniture specialists outlet data, 2002-06
• Consumer Trends
  • Figure 13: Agreement with lifestyle statements relating to the home in Germany, 2003, 2005 and 2007
  • Figure 14: German attitudes to the home relative to France, Spain and UK, 2003, 2005 and 2007
• Retail Competitor Analysis
• Key findings
• Leading players
  • Figure 15: Germany: Leading furniture retailers, 2007
• Market shares
  • Figure 16: Germany: Leading furniture retailers market shares, 2007
• Höffner/Möbel Kraft/Sconto
  • Figure 17: Höffner/Möbel Kraft/Sconto: Sales as share of furniture retailers sales' in Germany, 2003-07
• Strategic evaluation
• Background
• Financial performance
  • Figure 18: Höffner/Möbel Kraft/Sconto: Estimated sales performance, 2003-07
• Store portfolio
• Retail offering
• Market positioning
• Product offer
• Brands
• Prices
• Customer service
• e-commerce
• Ikea
  • Figure 19: IKEA Europe: Sales as share of furniture retailers' sales in Europe, 2003-07
• Background
• Strategic evaluation
• Financial performance
  • Figure 20: IKEA: Group financial performance, 2002/03-2006/07
  • Figure 21: IKEA: Largest markets, 2006/07
  • Figure 22: IKEA: Sales as share of furniture retailers' sales in France, 2002/03-2006/07
  • Figure 23: IKEA France: Performance, 2002/03-2006/07
  • Figure 24: IKEA: Sales as share of furniture retailers' sales in Germany, 2002/03-2006/07
  • Figure 25: IKEA Germany: Performance, 2002/03-2006/07
  • Figure 26: IKEA: Sales as share of furniture retailers' sales in Sweden, 2002/03-2006/07
  • Figure 27: IKEA Sweden: Performance, 2002/03-2006/07
  • Figure 28: IKEA: Sales as share of furniture retailers' sales in UK, 2002/03-2006/07
  • Figure 29: IKEA UK: Performance, 2002/03-2006/07
• Store portfolio
  • Figure 30: IKEA: Number of stores per country, 2006/07
  • Figure 31: IKEA: Outlet data, 2002/03-2006/07
  • Figure 32: IKEA: Planned openings, year ending August 2008
• Retail offering
• Retail offer
• Market positioning
• Pricing
• Operational issues
  • Figure 33: IKEA: Purchasing by region, 2007
• Advertising
• Brand and loyalty card
• e-commerce
  • Figure 34: IKEA: Websites
• Jysk
  • Figure 35: Jysk (Europe): Sales as share of furniture retailers in Europe, 2003-07
• Strategic evaluation
• Background
• Financial performance
  • Figure 36: Jysk: Group financial performance, 2002/03-2006/07
  • Figure 37: Jysk: Share of furniture retailers' sales in Denmark, 2002/03-2006/07
• Store portfolio
  • Figure 38: Jysk: Outlet data, 2002/03-2006/07
• Retail offering
• Market positioning
• Brands
• Product offer
• e-commerce and home shopping
• Porta
• Background
• Financial performance
• Store portfolio
• Retail offering
• e-commerce and home shopping
• Roller
• Background
• Financial performance
• Store portfolio
  • Figure 39: Roller: Outlet data, 2003-07
• Retail offering
• e-commerce and home shopping
• Segmüller
• Background
• Financial performance
• Store portfolio
  • Figure 40: Segmüller: Outlet data, 2003-07
• Retail offering
• e-commerce and home shopping
• XXXLutz
  • Figure 41: XXXLutz: Sales as share of Furniture retailers sales in Germany and Austria, 2002-06
• Strategic evaluation
• Background
• Financial performance
  • Figure 42: XXXLutz: Group financial performance, 2002/03-2006/07
  • Figure 43: XXXLutz (Germany): Sales as share of furniture retailers in Germany, 2003-06
  • Figure 44: XXXLutz (Austria): Sales as share of furniture retailers in Austria, 2003-06
• Store portfolio
  • Figure 45: XXXLutz group: Outlets, 2008
  • Figure 46: XXXLutz: Outlet data, 2003-07
• Retail offering
• Market positioning
• Product offer
• e-commerce