Moving in on the home front

The housing market recovery is boosting the 3.5bn homewares sector, with specialists muscling in on traditional outlets.

The coloured dustbins on sale at specialist homewares retailer The Source are a way of giving an everyday purchase a bit of style and encourage impulse purchase.

You may not be rich enough to furnish your home with expensive sofas and antique chairs, but for a few pounds you can buy ornaments and knick-knacks which are stylish and fashionable.

The desire by many consumers to clutter their homes with cheerful bric-a-brac has led to a new breed of retailers looking at ways of giving home products a special appeal. With the housing market showing its strongest growth for many years, more opportunities are arising to sell curtains, bedding, cushions, rugs, lighting, crockery, kitchenware and glassware.

Inspired by ideas imported from the US, chains such as Sears-owned The Source, Jerry’s Home Store, MFI Homeworks and Cargo Homeshops are offering shoppers a whole array of homeware products, with most goods selling for under 100. One of their strengths is that they offer impulse purchases, and are especially good at turning everyday products into something special.

According to Mintel, in its new report Housewares Retailing, the market has been under considerable pressure for the past five years, with recession and a slow housing market keeping sales flat. The sector is worth about 3.5bn, and has fallen in value by one per cent since 1990.

But with the recession easing over the past year, retailers are looking at ways of unlocking shoppers’ desire to get out and spend. Housewares is an ideal market for this, as it is largely impulse purchases of disposable products that don’t require high spending.

In such a diffuse market, it is the retailers which drive sales rather than manufacturers. The ability to come up with popular retailing formats is all-important to draw in customers.

As purchases are often at low prices, it is important to attract as many people as possible through the doors. This has led to a debate as to whether homeware retailers are best placed in out-of-town retail parks or on the high street. Some argue that a high street location is essential, as these are rarely destination shops, but somewhere shoppers will pop into while they are out buying other things.

Sears’ experimental format The Source has two stores on retail parks, and is planning an opening on London’s Kensington High Street next year. The success of these trial stores should provide some answers about the ideal location for houseware retailers.

Housewares have traditionally been sold through department stores, which have the advantage of selling other products that attract other shoppers. But other variety retailers and furniture stores also take an important slice of the market.

As far as existing specialists go, only The Pier with 15 shops, and to some extent the Reject Shop with 17 outlets, have established any real presence on the high street. But this has not stopped the Reject Shop going into receivership and being rebranded as RKs.

The improving state of the economy, combined with stronger retail formats and moves to make homewares more fashionable, leads Mintel to forecast the market growing by three per cent in real terms by the end of the century.

Mintel head of research Paul Rickard says the improving fortunes of the UK economy have opened the way for the next generation of housewares retailers.

He adds: “The market is due for a new lease of life, and the specialists can take over the mantle from established retailers such as Habitat and Boots.” The specialists may also provide established retailers with ideas about how to improve their own offers.