Taking covers off the bed market
Bed Mattress Industry
Ask any manufacturer–or retailer for that matter–currently about the state of trade in the UK bed industry and you are likely to elicit a response of rolled eyes and shrugged shoulders: it’s tough our there–tougher than it’s been for quite some time.
Of course, the whole of the furniture industry is suffering from the same sales malaise (other entirely unrelated industries are, too) and there are plenty of outside influences to blame: the war in Iraq; worries about pensions; problems with the stock market; the stalling housing market; low interest rates affecting savings; redundancies–even the reasonably good weather. Most people agree that even if the pundits are not calling it a recession it’s certainly beginning to feel pretty much like one. Many manufacturers are relieved it’s summer and the holidays are due, staving off the inevitable necessity for short time if things don’t pick up soon.
Of course, statistics don’t always reflect what’s happening now in the market place–for a start they are somewhat historical and, according to the consumer sales figures from the first quarter of 2003 (produced by GfK marketing Services) beds sales are up both in volume and value terms by around 7-8% compared with the first quarter of 2002–to almost 4.3 million beds worth over 1.2 billion [pounds sterling] at retail prices. But the first quarter is generally stronger than the second–which does not have the benefit of the January sales to lend a helping hand.
But the bed industry is not only dealing with a particularly quiet period (and despite the long faces, dealing with it slightly better than some other sectors). They’re facing fundamental changes in the structure of the industry–changes which are happening fast. Until now the bed manufacturing has watched rather smugly from the sidelines as the cabinet and upholstery sectors have seen imports go through the roof.
A decade ago imports of beds hovered around the 2-3% mark and no-one expected it to change much. Natural trade barriers existed–different product tastes (the UK’s penchant for divans with drawers in them, for instance); different bed sizes; even the UK flammability regulations all helped to keep the wolf from the door.
But then bedsteads started to happen–helped along by a huge growth in the number of home interest magazines and TV programmes on furnishing and decorating or moving house–all featuring the more aesthetically interesting bedstead. Today bedsteads account for around a quarter of the total consumer bed market and mattress-only sales for a further 23% (volumes were up a massive 16% year on year from march 2002 to 2003). Divans, from having a 50% plus share 10 years ago, have dropped to just a third. Although GfK’s latest figures show a gratifying fight back lately (sales are up 14% year on year).
Bed Manufacturer and Mattress Selling
And the trouble with bedsteads is that most of them are coming from overseas: visit any Far Eastern exhibition these days and you’re likely to see as many bed people there as you are at the NEC! In four years from 1996 to 2000 alone imports trebled to reach around 10% of the market.
Some pundits predict that the UK bed manufacturing market could well go the way of Europe–our manufacturers becoming solely mattress producers. The problem with selling mattresses-only is the risk of them becoming much more of a commodity product where ‘cheapness’ takes priority over comfort or value.. What you can’t beat you need to join however and so many manufacturers are themselves sourcing ranges of bedsteads to offer alongside their more conventional bedsteads. AUK source is certainly less hassle for many retailers than dealing in long distances with container loads that don’t always contain what they’re supposed to!
Statistical Number about Bed Market
Memory Foam Mattress Market in the US, Research Report Size, Analysis, Share, Forecast 2012-2016
But now there’s a new import threat: for mattress as well. The larger retailers have already started to source supplies of cheaper mattresses from Eastern Europe and it is feared that the floodgates are about to open. Significantly, driving this trend, are the newcomers to bed sales who are are rapidly beginning to make their mark. While independents manage to cling on to around 2-25% of the bed market place, the DIY stores are coming: they have just 4% now (according to GfK) but that figure was just 1% in 1999.
And the domination of catalogues is also noticeable–Argos has almost doubled its market shares from 1999 to 2003–from 7-13%; while the;e the home shopping sector accounts for around 16%. And most of that is in the cheaper 100 [pounds sterling]-300 [pounds sterling] retail price sector.
So, the advent of a cheap source of mattresses from abroad poses a serious threat, particularly to the UK’s mass market producers. There is likely to be a polarisation in the marketplace; the UK may well lose the lower end completely to imports (are we rapidly becoming a nation of distributors?) Estimates suggest there are more than 180 bed manufacturers in the UK; this number is sure to decline.
But there is still a fight to be had for the mid to better end. Who will be the winners? Conventional wisdom suggests that it will be the companies–both manufacturing and retail–who create strong product and brand identities satisfying the more discerning needs of an ever more sophisticated consumer. Sure, there will always be a big slice of the market which wants cheap, cheerful and purely functional. But at the other end of the scale there will be a demand for premium, design-led products which specifically satisfy specific needs.
There are a host of sociological trends which potentially can have a major effect on the style and type of bed to be made, which the canny company will be monitoring carefully, says Mike Rayner, managing director of Relyon Beds. As examples he cites the needs of an ageing population; more single households; smaller homes (and bedrooms); the increased height and body weight of the population; ongoing parental concern about sleep quality for their children and themselves; and the two to three-fold increase in domestic allergies reported by the Royal College of Physicians in June this year with the dust mite named as number one culprit.
Already we are seeing product which meets some of these needs. Take no turn mattresses for instance–a classic case of a marketing led product. (Few consumers would have thought of asking for these–but when presented with the option, it’s the natural choice for a consumer used to being presented with labour saving products in every other walk of life).
Other issues are also looming–in future the industry will no doubt have to come to grips with cradle to grave product life cycle strategies in the same way that the car industry has done. Landfill sites for old beds are rapidly filling up and eventually the government will force industry to take some of the responsibility for dealing with disposal and even recycling.