The full impact of the winter lockdown and Brexit on the bed industry has been revealed in the latest state of trade survey by the National Bed Federation (NBF).
More than eight out of 10 (83%) responding members* said they had seen sales drop when comparing the December 2019/January 2020 period to December 2020/January 2021.
Nearly a third (30%) said sales had plunged by -50% or more, while a further 40% reported being between -20% and -40% down.
In a report which paints a bleak mid-winter picture, 72% of those taking part said they had already made redundancies while 56% expect to do so. Production departments have been the hardest hit, with headcount reductions of between 10-25% commonplace.
While there is some optimism around a pickup in sales as restrictions lift (43% anticipate a YoY rise of up to +20%), well over half (57%) of respondents expect no change, or for sales to be down overall.
A huge 90% expressed concern about the ongoing impact of Covid restrictions on orders over the next six months, while 16% think the ending of Government support, and 14% the lack of clarity, will have a further effect.
Also causing concern among members are hefty material and component price rises (80%) and the volatility of materials supply – some of it linked to Brexit. 30% of those importing had been severely impacted by transport issues (63%), additional paperwork (52%) and proof of origin issues (30%).
NBF executive director Jessica Alexander says: “These are bugging both importers and exporters and there is particular concern over the increased paperwork required to send goods to Northern Ireland. And many in our sector, used to the Republic of Ireland being a seamless extension of their Northern Ireland business, feel they are now being priced out by the extra costs and duties.”
Asked what they expect to happen to costs over the next six months, members unanimously reported they were heading upwards, with 45% saying they anticipated increases of between +5% and +10%. These cost pressures are inevitably being met by price rises, with 43% predicting they will need to reflect the +5-10% uplift in factory gate prices.
Jessica adds: “The overall picture is currently incredibly challenging but we remain hopeful that if the anticipated April 12th re-opening of non-essential retail goes ahead we will see a return of the pent-up consumer demand experienced last summer.”
The results of the latest NBF state of trade survey are being passed on to the All Party Parliamentary Furniture Industry Group (APPFIG) and British Furniture Confederation (BFC), which has already called on the Chancellor – ahead of his 3rd March budget – to extend existing Government support schemes, the VAT deferral period and business rates.
The issues were also discussed in a furniture industry webinar on 24th February, run jointly by the APPFIG and BFC.
*30 members responded to the NBF state of trade survey, of which: 77% were selling to retail; 20% to other outlets including wholesalers and component suppliers; and 3% to hospitals.
