Boston, MA -- (SBWIRE) -- 10/27/2014 -- The weak situation of the real estate market continues to be the main burden for the evolution of home furnishing in Spain. As the prices of real estate continue to fall, the interest of Spaniards in investing in properties lessens. The restriction of access to credit is another factor which discourages purchases of new houses by consumers. According to the National Institute of Statistics (INE), purchases/sales of new floors showed a double digit drop in the previous year. This impacted volume sales of all categories of home furnishing during 2013.

Competitive Landscape

IKEA Iberica led sales of home furnishing in Spain, closing 2013 with total share of 11% which represents value sales of EUR983 million. The relevance of IKEA within the category is attributed to its vast range of products with contemporary design at very affordable prices. The Swedish home furnishing and homeware specialist benefited from the high consumer frugality and rise in demand for DIY and low-priced kit furniture, which resulted in the company increasing its share within home furnishings for another consecutive year, showing the most dynamic performance of 2013.

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Industry Prospects

It is expected that during the forecast period, the extension of the recession will continue shaping the purchasing patterns of Spanish consumers, especially during the first part of the period. Despite the improvement in the economy expected from 2015 onwards, according to data of the IMF, the fact that the unemployment rate is expected to remain over 25% until 2017 will continue restricting spending among consumers. This will hinder the performance of home furnishings, as it will discourage renewal and investment in new furniture. With a clear focus on price and spending, the demand for low-cost furniture in kit format will rise; a factor which will further limit value growth of the sector. As a result, home furnishings will post a negative value CAGR of 1% at constant 2014 prices during the forecast period.

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