Ikea continues its dominance of the German home furnishings market

Germany is the most important furniture market in Europe. On average, Germans spend about €500 per year on decorating their homes, with €360 of this for new furniture.

Even though in many cases the home furnishings category faces saturation and lack of innovation, societal and lifestyle changes in Germany open up new sales opportunities and help create additional revenue in some of the categories.

Discounting and price dumping, especially for furniture, pose a threat to the category.

A shift in focus to certain rooms is visible in Germany - it is becoming more and more popular to use the bathroom and kitchen as additional living areas and indoor wellness oases.

Cooking and celebrating with friends in a large kitchen is not just a scene from a TV show anymore and having a relaxing spa day at home with a friend or partner is also increasingly popular.

The market is continuing to polarise with the large outlets continuing to increase their market domination while discounters consolidate their position at the other end of the market.

Despite changing trends (see below), price is still the dominant purchase motivator. The promotional activity produced by retailers and distributors reflects this.

With an overall share of 10%, IKEA remains on top of the German home furnishings market. Rank two and three, each with only a 1% market share go to the kitchen manufacturer Nobilia and the furniture company Hülsta.

Due to the high level of fragmentation of home furnishings, changes in value size barely matter in terms of shares since even relatively strong companies only form a small portion of the overall category.

Price pressure, not only due to cheap imports but also high competition due to the strong fragmentation of the categories, is expected to increase further over the next five years.

Especially with an economic slowdown, people will expect prices to either adjust accordingly or look for cheaper alternatives, thereby also threatening further growth.

For more information on the German home furnishings market, see the latest research: German Home Furnishings Market

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