Our Markets

Overview

Our market is highly fragmented, with approximately 4,000 floorcoverings businesses. Current estimates place the UK market at £2.0bn per annum for the calendar year to December 2017, placing ourselves as the market leader with a share of around 20%.

The nature of our product means that the vast majority of customers prefer to visit a store to make their purchase, to give them the opportunity to see and touch their choice of floorcovering. However, the internet is playing an ever-increasing role in pre-purchase behaviour, becoming a vital research tool for many customers, and the rapid growth of smart phone and tablet use underlines the importance of having an effective and integrated digital proposition.

Product ranges

Whilst carpet remains the dominant product category in floorcoverings, we have historically over-indexed on carpet product ranges relative to wider market preferences. We are redressing this bias by substantially extending our offer in the hard flooring area to better reflect consumer tastes.

In our UK business, beds provides an important complementary revenue stream to our core floorcoverings offer and we believe this category has significant further growth potential. The total beds and bedding market is estimated at £3.2bn and our market penetration, whilst low, is growing steadily as we establish our credentials in this competitive sector.

Macroeconomic indicators

The period of sustained economic uncertainty has been especially challenging for the floorcoverings sector in the UK, with fragile consumer confidence and shoppers deferring big ticket purchases.

Whilst macroeconomic indicators in Belgium remained fragile, the Netherlands and the Republic of Ireland experienced a recovery in market conditions with an increase in reported consumer confidence and encouraging economic benchmarks.

We see moving house as a key stimulant of demand and a potential lead indicator of activity in the home improvement sector. Having grown steadily from 2013 to early 2015, UK housing transactions were then relatively flat through to February 2016.

During this financial year transactions have declined by around 10% to a monthly average of 98,000 as at April 2017 down from 109,000 in April 2016.

Consumer confidence

Consumer confidence, which has been fragile for some time, remains a key driver of our performance. During the course of the financial year the average level of consumer confidence was -5, which compares to +2 in the prior year comparative.