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Consumer Trends, Attitudes and Spending Habits for the Home - UK - January 2018

“In 2017, spending remained strong on buying for the home in the UK, despite growing uncertainty about the economy. But in the five years from 2017-22 market growth will slow, as consumers feel a real squeeze on their personal disposable income. Owner-occupiers and those who say that their finances are healthy are the most active group of purchasers for the home, especially for high ticket items and large projects, and this group is least affected by any downturn in the economy. At the same time, many of today’s under-35s are priced out of the housing market, feel financially stretched and rent privately. This has created short-term attitudes towards buying for the home, encouraging low-ticket purchases and reshaping priorities when spending on the home.”
– Jane Westgarth, Senior Market Analyst

This Report looks at the following areas:

  • Will there be an ‘improve not move’ trend as economic uncertainty influences consumer confidence? 
  • Are consumers buying into smart home products? 
  • What impact is the rise in private renting having on demand for products for the home?

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • The market
            • Robust market growth in 2017
              • Figure 1: Consumer spending on the home, 2012-22
            • Living and dining room furniture is a priority for shoppers
              • Figure 2: Consumer spend on the home, by segment, 2017 (est)
            • The housing market has plateaued
              • Figure 3: UK Housing transactions, 2012-17
            • Financial situation is weakened by concerns about the economy
              • Figure 4: How consumers describe their financial situation, January 2013-September 2017
            • Smart connected devices pose new challenges for retailers
              • The consumer
                • Intentions for spending in 2018 similar to 2017, although furniture is down
                  • Figure 5: Spending on the home in the last year, and intentions to spend on the home in the next year, October 2017
                • High level of confidence about spending on the home
                  • Figure 6: Confidence about spending on the home, October 2017
                • Households spend to enhance enjoyment of their homes
                  • Figure 7: Reasons for spending on the home, October 2017
                • 21% will tighten their budget for the home in 2018
                  • Figure 8: Intentions for spending more or less on the home in the next year, October 2017
                • Range and quality must compete with special offers to attract shoppers
                  • Figure 9: Factors influencing choice of retailer for major purchases, October 2017
                • 72% take pride in their homes
                  • Figure 10: Attitudes regarding the home, October 2017
                • What we think
                • Issues and Insights

                  • Will there be an ‘improve not move’ trend as economic uncertainty influences consumer confidence?
                    • The facts
                      • The implications
                        • Are consumers buying into smart home products?
                          • The facts
                            • The implications
                              • What impact is the rise in private renting having on demand for products for the home?
                                • The facts
                                  • The implications
                                  • The Market – What You Need to Know

                                    • Spending on the home remained strong in 2017
                                      • Flat market conditions ahead
                                        • Market segmentation
                                          • 1.3 million more households by 2022
                                            • Patterns of home ownership are changing
                                              • Owner-occupiers feel better off
                                                • The housing market has plateaued
                                                  • Owner-occupiers most likely to have gardens
                                                  • Market Size and Forecast

                                                    • Robust market growth in 2017
                                                      • Figure 11: Consumer spending on the home, 2012-22
                                                    • Market share growth will be an important strategy
                                                      • Figure 12: Consumer spending on the home, 2012-22
                                                    • Forecast methodology
                                                    • Market Segmentation

                                                      • Market segmentation
                                                        • Figure 13: Consumer spending on the home, by segment, 2017 (est)
                                                      • Living and bedroom furniture have been strongest
                                                        • Figure 14: Consumer spending on the home, 2012-17
                                                    • Market Drivers

                                                      • 1.3 million more households by 2022
                                                        • Figure 15: UK households, by size, 2012-22
                                                      • Patterns of home ownership are changing
                                                        • Figure 16: Number of households in Great Britain, by tenure, 2011-15
                                                      • 30% of 25-34s are in privately rented property
                                                        • Figure 17: Household tenure, by age group, 2017
                                                      • 23% of private renters moved in the last year
                                                        • Figure 18: Length of time in current home, by tenure, October 2017
                                                      • Owner-occupiers feel better off
                                                        • Figure 19: Household financial situation, by tenure, September 2017
                                                      • The housing market has plateaued
                                                        • Figure 20: UK Housing transactions, 2012-17
                                                      • Easy to find second-hand items
                                                        • Surplus space at home creates opportunities for a wider range of interiors and usage
                                                          • Figure 21: Usable floor area, by tenure, England, 2015
                                                        • The nation’s gardens
                                                          • Figure 22: Presence of gardens, balconies and allotments, March 2017
                                                        • Consumer confidence weakened by concerns about the economy
                                                          • Figure 23: How consumers describe their financial situation, January 2013-September 2017
                                                        • Interest rate rises cool demand for consumer debt
                                                          • Interest in the smart home is growing
                                                            • Figure 24: Ownership of smart/connected devices, December 2016
                                                          • High level of interest shows that the market for smart home devices will take off
                                                            • Figure 25: Interest in smart/connected devices, December 2016
                                                        • Companies and Brands – What You Need to Know

                                                          • Big changes in the DIY sector
                                                            • Trade-focused outlets growing strongly
                                                              • Intense competition among sofa retailers
                                                                • Omnichannel retailing works best
                                                                  • High growth homewares retailers
                                                                    • IKEA puts on a growth spurt
                                                                      • The smart home market enters a new phase
                                                                        • IKEA continues to innovate
                                                                          • Help with visualising items in your own home will become a key battleground for retailers
                                                                          • Competitive Strategies

                                                                            • Big changes in the DIY sector
                                                                              • Bunnings’ rollout begins in the UK as Homebase is realigned as a low-price DIY chain
                                                                                • B&Q now every-day-fair price and repositioning the stores
                                                                                  • Wickes benefits from softer approach
                                                                                    • Trade-focused outlets growing strongly
                                                                                      • Intense competition among sofa retailers
                                                                                        • Fabb Sofas expands
                                                                                          • DFS will acquire Sofology
                                                                                            • Other sofa news
                                                                                              • Omnichannel retailing works best
                                                                                                • Retailers that began online are opening shops
                                                                                                  • Amazon considering opening furniture shops
                                                                                                    • High growth homewares retailers
                                                                                                      • Dunelm is setting the pace
                                                                                                        • Oak Furniture Land now over 90 outlets
                                                                                                          • Wren Kitchens has boosted sales per outlet
                                                                                                            • IKEA puts on a growth spurt
                                                                                                              • Concentration of the garden sector
                                                                                                                • Acquisition has driven growth of garden chains
                                                                                                                  • Importance of in-store restaurants and cafés
                                                                                                                  • Launch Activity and Innovation

                                                                                                                    • Home hubs evolve to add new skills, including those developed by third parties
                                                                                                                      • Amazon Echo was first on the scene
                                                                                                                        • Google launched its home hub in 2017
                                                                                                                          • Microsoft has developed its own personal assistant
                                                                                                                            • Retailers embrace the connected home
                                                                                                                              • Furniture retailers continue to innovate
                                                                                                                                • IKEA’s click-together furniture is simpler to assemble and move
                                                                                                                                  • Figure 26: IKEA’s wedge-dowel furniture, 2017
                                                                                                                                • IKEA considers furniture rental packages
                                                                                                                                  • Help with visualising items in your own home will become a key battleground for retailers
                                                                                                                                    • Figure 27: Benchmarx, 3D image of kitchen plan, 2017
                                                                                                                                    • Figure 28: IKEA Place app, 2017
                                                                                                                                  • A room that can automatically reconfigure itself
                                                                                                                                    • Figure 29: Ori, micro-apartment that automatically reconfigures, 2017
                                                                                                                                    • Figure 30: John Lewis, furniture for small spaces, 2017
                                                                                                                                  • Retailers embrace social media
                                                                                                                                  • The Consumer – What You Need to Know

                                                                                                                                    • 63% have spent on their homes
                                                                                                                                      • Homeowners with a mortgage are a key shopper group
                                                                                                                                        • High level of confidence about plans to spend
                                                                                                                                          • Reasons for spending on the home
                                                                                                                                            • Wide variety of reasons for spending on the home
                                                                                                                                              • 21% will tighten their budget for the home in 2018
                                                                                                                                                • Range and quality must compete with special offers to attract shoppers
                                                                                                                                                  • Stores remain relevant to shoppers
                                                                                                                                                    • Leisure time spent at home
                                                                                                                                                    • Spending on the Home

                                                                                                                                                      • Decorating and free-standing furniture top the list of purchases
                                                                                                                                                        • Figure 31: Spending on the home in the last year, October 2017
                                                                                                                                                      • House moves influence demand for spending on the home
                                                                                                                                                        • Scottish households do the most decorating
                                                                                                                                                          • How important are private renters?
                                                                                                                                                          • Intentions to Spend on the Home

                                                                                                                                                            • 36% of households will do some decorating in 2018
                                                                                                                                                              • Figure 32: Intentions to spend on the home in the next year, October 2017
                                                                                                                                                            • Intentions for spending in 2018 similar to 2017, although furniture is down
                                                                                                                                                              • Figure 33: Spending on the home in the last year, and intentions to spend on the home in the next year, October 2017
                                                                                                                                                          • Confidence about Spending on the Home

                                                                                                                                                            • High level of confidence about spending on the home
                                                                                                                                                              • Figure 34: Confidence about spending on the home, October 2017
                                                                                                                                                          • Reasons for Spending on the Home

                                                                                                                                                            • A combination of emotional and practical reasons drive demand for the home
                                                                                                                                                              • Figure 35: Reasons for spending on the home, October 2017
                                                                                                                                                            • Replacement is a major driver of demand
                                                                                                                                                              • Home is a happy place
                                                                                                                                                                • Time to update the style
                                                                                                                                                                  • Storage matters most to younger households
                                                                                                                                                                    • The home as an investment
                                                                                                                                                                      • Improving not moving is a factor behind some home spending
                                                                                                                                                                        • More space please
                                                                                                                                                                        • Spending More or Less on the Home in the Next Year

                                                                                                                                                                          • 21% will tighten their budget for the home in 2018
                                                                                                                                                                            • Figure 36: Spending more or less on the home in the next year, October 2017
                                                                                                                                                                        • Factors Influencing Choice of Retailer for Major Purchases

                                                                                                                                                                          • Shoppers demand quality, range and price
                                                                                                                                                                            • Figure 37: Factors influencing choice of retailer for major purchases, October 2017
                                                                                                                                                                          • Range and quality must compete with special offers to attract shoppers
                                                                                                                                                                            • Omnichannel shopping is here to stay
                                                                                                                                                                              • Broad appeal of interest free credit (IFC)
                                                                                                                                                                                • Relevance of the specialist
                                                                                                                                                                                  • Planning services
                                                                                                                                                                                  • Attitudes Regarding the Home

                                                                                                                                                                                    • Today’s homes fulfil a wide range of functions
                                                                                                                                                                                      • Figure 38: Attitudes regarding the home, October 2017
                                                                                                                                                                                    • Leisure time and watching TV at home is popular
                                                                                                                                                                                      • 72% take pride in their homes
                                                                                                                                                                                        • Meal time habits influence demand for furniture
                                                                                                                                                                                          • The kitchen is a home hub
                                                                                                                                                                                            • Younger people enjoy inviting friends into the kitchen
                                                                                                                                                                                              • Working from home places different demands on space
                                                                                                                                                                                                • DIY can be an engaging pastime
                                                                                                                                                                                                  • Practical hobbies at home
                                                                                                                                                                                                    • Gardening more popular as people age
                                                                                                                                                                                                    • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                                        • Abbreviations
                                                                                                                                                                                                          • Consumer research methodology
                                                                                                                                                                                                          • Appendix – Market Size and Forecast

                                                                                                                                                                                                            • Forecast methodology

                                                                                                                                                                                                            Consumer Trends, Attitudes and Spending Habits for the Home - UK - January 2018

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