The furniture market - Spain

1.2 A booming world market

According to data from Global Market Insights, the global furniture market was estimated to be worth more than $*** billion in **** and is expected to grow by *% annually until ****. It is mainly driven by demand from the United States and Asia Pacific, which are the largest markets but also the most dynamic (***).

Size of the furniture market World, ****-****, in billions of US$ Source: ****

Globally, the market is benefiting from the growth of urbanisation. While in ****, according to the UN, more than half of the global population (***) lived in urban areas, this proportion is expected to rise to **% in ****. The market also continued to benefit from global growth in ****, estimated at *.*% by the IMF, but, having a high elasticity with respect to household consumption, the market could suffer from the Covid-** crisis.

The factors which the world market is currently based on are:

The growth of urbanisation Elasticity to global growth The emergence of a middle class in emerging countries, which is reflected in a growing interest in decoration and furnishing. The growth of the real estate market: the increase in the growth rate of new construction, particularly in developing Asian countries

Here we consider the data provided by Eurostat for the ...

1.3 A positive Spanish market

In Spain, the activity of manufacturing furniture is recorded under the code CNAE ***. In ****, the total turnover of companies operating under this code in Spain was of *.** billion, a *.*% increase from ****, and **.*% from **** - a very promising growth [***].

Turnover of companies operating under the code CNAE *** - "Furniture manufacture" Spain, ****-****, in billions of euros Source: ****

However, the furniture market in Spain is estimated at a lower value than that of the turnover of the companies operating in it, which suggests that the companies operating in this sector may have activities in other sectors too. In ****, the furniture market in Spain was estimated at just over €*.* billion, a figure that has been constantly growing since ****, but that is expected to have decreased in **** due to the Covid-** pandemic [***]. 

Value of the furniture market Spain, ****-****, in billions of euros Source: ****

It is important to note that the figures used above to calculate the size of the market do not include mattresses nor furniture for retail shops, also explaining why these figures are lower than that of the total turnover of the companies in this sector.

In terms of retail trade (***), the market achieved a total sales of *.** billion in ****, a *.*% increase ...

1.4 Imports and exports

For this section we use UN Comtrade to obtain the trade balances for Spain with the world for the category ** - "Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed furnishings; lamps and lighting fittings; illuminated signs, illuminated name-plates and the like; prefabricated buildings".

With just over *.* billion US$ worth of imports and nearly *.* billion US$ worth of exports in ****, Spain was the *th and *rd country with the largest amount of imports and exports of furniture (***) [***].

It is important to note that these figures include elements beyond the scope of this study (***), therefore it can be expected that the true figures will be smaller than these ones.

However, as can be seen in the graph below, the amount of imports have been decreasing since ****, while the amount of exports have also decreased between **** and ****. This recent decrease can be potentially explained by the crisis caused by the Covid-** pandemic. Moreover, it is also important to note that Spain's coverage ratio for the trade of furniture has remained pretty stable at just above **%, meaning that there has not been any imbalance between the increase/decrease of imports and exports.

Trade balance for furniture (***) Spain, ****-****, in billions of US dollars and ...

1.5 The impact of Covid-19

Just like most other sectors in the economy, the furniture market was also negatively impacted by the Covid-** pandemic. For instance, the average consumer spending on household furniture decreased by **% between **** and ****, going from €*** to €*** (***) [***].

However, it is not all bad news for the furniture market. In fact, the sector experienced an unexpected boom following the end of the state of alert imposed by the Spanish government. This even resulted in scarcity of some materials used for the production of some furniture products, as well as a delay in the delivery of some other products [***].

A furniture product that has seen its demand increase due to the pandemic is the sofa. As people have been staying at home for longer periods of time, their sofa cushions have started to wear out and they see the need to invest into new and more comfortable sofas. Spain's largest sofa manufacturer, Tapizados Mayo, has reached ***% capacity [***].

Moreover, in regards to the new "work from home" trend, office desks and chairs also experienced a significant boost in demand. Similarly, outdoor furniture (***) also experienced a significant growth in demand, with its sales increasing by **% compared to the same period in **** [***].

Online sales of furniture were also ...

2.1 Household furniture leading the way

There are three main categories of furniture that compose the whole market in Spain:

Household furniture (***) Kitchen furniture Office furniture Other furniture (***)

Of these, household furniture is the most important, representing **% of the total retail sales of furniture [***].

Breakdown of furniture retail sales by category of furniture Spain, ****, in % Source: ****

Despite the dominance of household furniture, it is the kitchen furniture category that is growing the fastest - a *.*% growth from ****, compared to a *.*% growth for both the household and office furniture categories [***].

Retail sales of furniture by category Spain, ****-****, in millions of euros Source: ****

2.2 A generally increasing consumption of furniture

Household furniture is the fifth most popular sector for consumers in Spain (***).

Percentage consumption by sector (***) Spain, ****, in % of people surveyed Source: ****

Furniture consumption in Spain has been following a positive trend in recent years. While general consumption in Spain decreased in **** due to the Covid-** pandemic, household furniture consumption increased by * percentage points between July **** and July **** - the second largest growth behind the growth of sports equipments (***). In relation to furniture, Cetelem's study separates this sector into * categories:

Household furniture (***) Relaxation elements (***) Kitchen furniture (***)

While household furniture and relaxation elements both experienced a growth in consumers between **** and ****, there was a decrease in the amount of consumers of kitchen furniture. Compared to ****, the amount of consumers for the different furniture products has generally increased.

Consumption of different furniture products Spain, ****-****, in % of people surveyed Source: ****

2.3 A relatively big budget for furniture

In ****, household and kitchen furniture were the third and fourth categories (***) where consumers spent the the largest sums of money. In fact, the only two categories where Spanish spent more money in **** were home renovations and travel/tourism. In ****, the average spending on household furniture by the Spanish was of €*** and €*** for kitchen furniture [***].

However, spendings on household furniture suffered a **% decrease between **** and **** due to the Covid-** pandemic - one of the hardest hit categories in terms of consumer spending. On the other hand, kitchen furniture experienced the biggest growth in spending between the same period out of all the categories (***).

Average consumer spending on different products Spain, ****-****, in euros Source: ****

3.1 A fairly fragmented market

The furniture market in Spain can be divided into * different categories:

Suppliers: Fittings, Sawn Timber, Boards, Paints and Varnishes and Glues and Adhesives. Manufacturers: Bathroom, Classic, Kitchen, Design, Fibre, Modern, Office, Rustic and Upholstered. Distributors: Chain Stores, Franchises, Department Stores, Group Stores and Independent Stores.

Distributors

In terms of retail sales, there are * main distribution channels: specialised retailers and large non-specialised retailers. Specialised retailers account for the larger share (***) of the total retail sales of furniture in Spain, which was €*.** billion in **** [***]. 

Distribution of furniture retail sales by distribution channel Spain, ****, in % Source: ****

There are *,*** companies operating under to CNAE code **** "Retail sale of furniture, lighting equipment and other household goods in specialised shops" as of ****. The combined turnover of the companies under this code was of €*.** billion in ****. The leader in this sector is, by far, Ikea, with a market share of approximately **%. Following Ikea is Conforama (***) and that most of the revenue of the sector is generated by smaller specialised furniture stores regionally [***].

Market share of companies operating under CNAE **** Spain, ****, in % Source: ****

In the market of wholesale distribution of furniture, competition is even more fierce than in the retail sector. Using the CNAE code **** (***), we find that there ...

3.2 A performance that varies between regions

Of the nearly €*.* billion of turnover generated by the companies in the furniture market in Spain in ****, it is the autonomous community of Valencia that contributes the biggest amount (***), followed by Catalonia, which accounts for **.*% of the total turnover [***]. 

Total turnover of companies operating in the furniture sector by autonomous community Spain, ****, in millions of euros Source: ****

Not surprisingly, the top * autonomous communities that contribute the most to the total turnover of the sector are also the * most populated regions of the country.

Moreover, in terms of the size of the companies, it is the companies with between **-*** employees that contribute the most to the sector's total turnover (***) contribute to **% of it [***].

Total turnover of companies operating in the furniture sector by number of employees Spain, ****, in millions of euros Source: ****

3.3 A market that mainly relies on physical distribution

It is expected that in a market such as the furniture one, most of the sales of products occur in physical retailers, given how people like to test/touch/see the furniture before they buy it. In fact, of the €*.** billion of furniture sold by retailers in Spain in ****, **.*% came from physical sales, while only *.*% was from online sales [***].

Retail sales of furniture by distribution channel Spain, ****, in % Source: ****

Moreover, if we look specifically at different categories of furniture, we see how large specialised retailers are the most popular distribution channels for the furniture market. For instance, **% of consumers buy their household furniture from such establishments.

Where do people buy their household furniture? Spain, ****, in % of people surveyed Source: ****

Similarly, for kitchen furniture and for elements of relaxation, large specialised retailers are where **% and **% of consumers buy such products (***). 

Where do people buy their kitchen furniture and elements of relaxation? Spain, ****, in % of people surveyed Source: ****

3.4 The growth of online sales

However, this trend is changing and the number of furniture sales done online has been increasing. Just from **** to ****, the amount of online furniture sales increased from €*** million to €*** million - a **% increase [***].

Total online furniture sales Spain, ****-****, in millions of euros Source: ****

Inevitably, this growth in terms of online furniture sales is projected to continure growing in the future, and the Covid-** pandemic should help increase the share of online sales as a proportion of total sales, as people were forced to perform their shopping habits from home due to lockdown restrictions.

In fact, the Covid-** pandemic resulted in a significant increase in online sales for furniture products (***). A study conducted by Cetelem to shed light on consumer habits in Spain concluded that online sales of household furniture, kitchen furniture and elements of relaxation increased by **, ** and ** percentage points respectively.

Percentage of people surveyed buying furniture products online Spain, ****-****, in % of people surveyed Source: ****

4.1 A wide range of products

The furniture market comprises of a wide range of products; from large furniture products (***).

Using the catalogue of the biggest furniture retailer in Spain, Ikea, we can get a fair representation of what types of products are available for consumers.

Source: ****

4.2 The increasing prices

Prices in the furniture market have been following an upwards trend since the beginning of the century, despite the growth slowing down since ****. Using the Consumer Price Index (***) for household furniture, we see that furniture is getting progressively more expensive for consumers [***].

Consumer Price Index for household furniture Spain, ****-****, Base *** in **** Source: ****

In terms of actual prices of furniture, we can see how much it would cost to furnish certain elements of a house. This can be seen in the table below.

Source: ****

5.1 Regulations

There are * important aspects that govern the sale and distribution of furniture products:

Labelling Warranties

Labelling

All furniture products put up for sale for consumers must [***]:

Incorporate, bear or permit, in a true and objective manner, effective, truthful and sufficient information about their essential characteristics. Leave no doubt as to the true nature of the product. Not be misleading or deceptive by means of inscriptions, signs, anagrams or designs. Not omit or falsify particulars in such a manner as to mislead or deceive the consumer or falsify the image of the product. Not contain indications, suggestions or forms of presentation which could lead to confusion with other products. Declare the quality or qualities of the product or its components on the basis of specific quality standards, where such standards exist. Warn of the dangerous nature of the product or its constituent parts, where foreseeable risks could result from its use.

Moreover, the furniture products' labels must include some essential information [***]:

Usual or commercial name of the product Composition Essential characteristics of the product, instructions, warnings, advice or recommendations on installation, use and maintenance, handling, danger or safety conditions Company identification Origin Price

Finally, in terms of the rules for the labels ...

6.1 Segmentation

• Ikea Espagne
• Conforama
• Signify Iberia
• Yudigar
• Grupo Alvic
• Kettal
• Martinez Otero
• Glicerio Chaves
• Lagrama
• El Corte Inglés
• Banak Importa
• Kibuc
• La Oca
• Punt Mobles
• Treku
• Andreu World
• Momocca Design