According to CSIL (‘Furniture retailing in Europe’ 2024 report), the European retail furniture market is worth EUR 165 billion. The market exhibited robust growth in 2021, followed by a deceleration in 2022, and a contraction in 2023 (-3.5%).

In 2023, influenced by the natural shift in demand post-pandemic, the rising cost of living has intensified pressure on consumer spending, particularly for big-ticket items such as furniture. However, it is worth noting that, despite ongoing uncertainties, the newfound significance of the home, stemming from the pandemic, is anticipated to drive new demand, with furniture extending beyond its practical functionality.

Europe continues to play an important role in the global furniture market, being the third-largest one in the world after Asia Pacific and North America. With more than 230 million households and one of the highest per capita consumption levels, Europe accounts for more than a quarter of the global world furniture market. Its influence is also discernible in production value and extends to market dynamics and international trade values.

Europe retains its status as a key hub in world trade, underscoring its continuing importance in terms of market size and overall impact on the global furniture landscape. A significant proportion of the current demand in Europe is met by EU production, making up 80% of the total consumption, while the remaining portion is sourced through imports from other countries.
About 80% of extra-EU imports originate from Asia-Pacific, more than two-thirds of which are Chinese products. Vietnam is in second place. In third place is Türkiye which is increasingly present on the EU market reaching an imports’ value of over EUR 1 billion. It is worth noting the increase in imports from India.

Historically, it is worth pointing out that import penetration reflects both the internationalization strategy of European manufacturers locating plants in low-cost labor countries and the global sourcing strategies of large-scale retailers (including leading online retailers). However, the value chain forces furniture manufacturers and retailers to rethink their strategies and implement actions taken along the supply chain.

Most furniture manufacturers surveyed by CSIL during 2023 claimed that they increasingly shorten their supply chains by being more local (at the country or regional level). Within Europe, Portugal, Italy, and Spain are the main beneficiaries of this perspective. The relocation is driven by various reasons, including shortening the time to market. Still, business sustainability, liquidity, and supply security have emerged as key issues that international events intensify.

According to CSIL, the role of large-organized furniture retailers has grown over the years and has largely affected market trends. The leaders in this segment are IKEA and XXXLutz, collectively representing about 20% of the channel. Small-scale independent retailers in the European furniture market showed resilience and adaptability facing competition from larger retailers and online platforms. In this context, it’s notable that while most independent stores are characterized by relatively modest turnover and store size, some have significantly expanded their average size.
The online channel has been the undeniable game changer in the furniture market during the pandemic outbreak, and it has continued to maintain a strong position well above pre-pandemic levels. In 2023, CSIL estimates that online sales accounted for over 10% of the total market.

Market concentration continued to increase in 2023, marked by various mergers and acquisitions among leading furniture retailers. Foremost among them was XXXLutz, which finalized significant deals such as Conforama Iberia, Tejo Mobel, and Home24. These transactions not only strengthened its foothold in existing markets but also facilitated entry into new ones, notably Spain and Portugal.

In addition to merger and acquisition transactions, market concentration increased due to strong performances from leading large-scale retailers. For instance, both IKEA and Jysk rose sales in Europe by 6% over 2022. Even more, the boundaries between different business models blurred quite rapidly in recent years, with companies frequently investing in the implementation of multichannel and omnichannel strategies.

Especially in the wake of the pandemic and post-pandemic trends, companies are learning to be quite flexible. Omnichannel is widespread among furniture retailers, both large-scale retailers and small independent stores, providing an integrated approach where all channels are interconnected and provide a seamless experience for the customer.

In this vein, investment in digitalisation has recently soared, with 3D configurators and virtual/augmented reality among the most popular. On the other hand, pure e-tailers in the furniture market have increasingly established a physical presence, often through showrooms or experience centers. For example, Made.com, Home24, Bolia, Kave Home, leading online furniture retailers, have opened stores in major European cities.

The furniture market has also become increasingly attractive to non-specialist furniture retailers, particularly fashion retailers, which are extending their reach into the furniture market, diversifying their product offerings beyond clothing and accessories. This will further intensify competition in the market, especially in the mid- and low-price segments. Leading examples include H&M Home and Zara Home.