Jan 24 2021

VDM: Importance of the home is growing

Last week, the German Furniture Industry Association (VDM) provided information on the current situation in the furniture industry in Germany. Although the importance of the own home grows among the consumers, one expects a decrease in sales of 4 percent in 2020. For 2021, the association urges a secured opening scenario and has specific demands for this.

After the volatile, difficult year of 2020, the start of the new year is also proving challenging for the German furniture industry - as it is for many other sectors of the economy. 

Last year, the German furniture industry experienced a very changeable course of business as a result of the Corona pandemic, VDM announced in a press conference. After drastic losses for furniture manufacturers in the lockdown spring, demand had picked up again very quickly and surprisingly strongly after the openings. The summer in particular was at an untypically high level for this time of year. Until the new lockdown in mid-December, the stable order trend for kitchen, upholstered and living room and bedroom furniture continued. The high demand in the home-related divisions also brought bottlenecks on the procurement side and extended delivery times.

For 2020 as a whole, the association expects sales in the German furniture industry to fall by around 4 percent. This is in line with the forecast from August, which had assumed a drop in sales of up to 5 percent. Sales are expected to reach around 17.2 billion euros. 

Staff reductions remain manageable

The current total of 468 companies with more than 50 employees (minus 1.8 percent) employs 82,601 women and men, which is only slightly (minus 2.2 percent) below the level of the previous year.

Lockdown shapes the start of the year

The associated closure of the furniture trade means that manufacturing companies no longer have a significant sales channel during the busiest time of the year. Despite good order backlogs, this is not only economically bitter for the industry, but also not without consequences for consumers. The need for furnishings could then no longer be converted into concrete purchases. Also the daily approximately 20,000 moves would naturally entail additions of the housing mechanism. What do I do in the new dwelling for example without kitchen, if at the same time also the catering trade closed?

Clear demands of the VDM

Although the association shows understanding for the tightened Corona restrictions, it urgently demands a perspective for the economy and consumers and has the following demands:

  • In the medium term, an economy in "secured mode". The German furniture trade, with its large sales areas and hygiene concepts that have been tried and tested for months, offers good conditions for this. 
  • In the short term, a nationwide option for online booking of consulting and sales appointments with a maximum of two people to control frequencies and reduce customer encounters. Online consulting and click & collect solutions should remain. 
  • In addition: equalization of opening hours into the evening and at weekends as well as the abandonment of frequency-increasing measures. 

Exports more affected than the domestic market 

Most foreign markets are currently much more affected by the crisis than the domestic market: German furniture exports fell by 6 percent to 5.9 billion euros in the first ten months of 2020 compared with the same period last year. 
According to VDM figures, France currently occupies first place in the ranking of the most important export markets with a drop of 6.3 percent. Austria follows in third and fourth place with a minus of 5.7 percent and the Netherlands with a minus of 0.6 percent. Sales of German furniture in the United Kingdom fell particularly sharply by 12.3 percent, a negative trend that had already been observed as a result of Brexit. 

Non-European export markets developed inconsistently

The association finds it difficult to provide a concrete outlook for business development in the coming months due to the imponderables of the pandemic. Much will depend on the timing of the reopening of the furniture trade, but one is optimistic. It is assumed that people will continue to give high priority to the topic of living and furnishing. The industry is well equipped for this. The topic of digitization is also gaining further momentum, as shown not only by the push for online furniture retailing, whose share is estimated at 18 percent for 2020.

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