Demand for kitchens and upholstered furniture is declining. The German furniture industry is suffering from a reluctance to buy and a poor order situation. Nevertheless, the industry association is optimistic.
Consumers in Germany are obviously particularly thrifty when it comes to furniture. The German furniture industry is expecting a nominal decline in sales of 7 to 9 percent this year. This was announced by the managing director of the industry association VDM, Jan Kurth. Adjusted for price, the decline will be even higher.
In the first half of the year, despite higher prices, companies achieved sales of 8.3 billion euros, almost 10 percent less than in the previous year. There were significant losses in both the kitchen furniture industry and upholstered furniture. The main reason for this is and remains the poor consumer climate in Germany. There is no improvement in sight. In August, the consumer climate index compiled by market researchers GfK and NIM fell significantly.
Beds 21 percent more expensive than in 2020
In addition to the reluctance to buy, furniture manufacturers are complaining about increased costs for personnel and energy, according to an association survey. Raw material prices, which had risen sharply in previous years, have stabilized at a high level. Customers are feeling this. According to the Federal Statistical Office, furniture is significantly more expensive than it was four years ago. Beds cost almost 21 percent more in July 2024, and upholstered furniture a good 16 percent more. Price dynamics have weakened, but moderate price increases cannot be ruled out, said VDM Managing Director Kurth. The stagnating construction of new housing continues to be a cause for concern.
Kurth is nevertheless optimistic. “We assume that the industry has bottomed out,” he said. The slightly improved business climate and the many increases in real wages are reasons for optimism. Asian shopping portals such as Temu or Shein say they are not causing any problems for the industry. They say they play no role in buying furniture in Germany. The majority of furniture is purchased in stationary furniture stores. Around half of the products sold in this country come from abroad.
Private consumption is increasingly flowing into travel
Furniture manufacturers’ sales had already fallen last year. Due to the difficult situation, many companies are using short-time work. In August, 38 percent of the companies surveyed applied for this. The bankruptcies of well-known companies are emblematic of the situation. The well-known furniture manufacturer Hülsta ceased operations on June 1. The furniture retailer Opti-Wohnwelt recently filed for bankruptcy, as did the manufacturer Schröder.
Christoph Lamsfuß from the IFH trade research institute sees several reasons for the crisis: “After investments in people’s own four walls during the pandemic years, the furniture industry is now seeing a decline in sales. Since the end of the pandemic, private investments have increasingly been channeled into travel again,” said the industry expert. After all, real wages have recently risen sharply. This will have a positive effect on consumption.
The furniture industry has recently shrunk again. There are currently 417 companies, compared to 431 last year. The number of employees has fallen from 75,300 to 71,841.
Source: Stern
