A look into German households: How much money does Germany invest in furniture?
COVID-19 has been part of our everyday lives for two years now, and we have spent much more time at home than before. So it's no surprise that tidying up à la Marie Kondo is booming, Netflix series like Dreamhome-Makeover are getting huge viewer numbers, and the reach of interior channels on Instagram is growing fast. To use the time set free reasonably, Germany devoted itself to redesigning the old kitchen or the child's room, which needed an age-appropriate update. But how much do Germans actually spend on their furniture? And did their buying behavior change significantly over the past two years? There was a lot of news coverage on this topic at the beginning of the year, and we summarize the most important results and statements in our February review.
It's no surprise: in the last two years, there has been a high demand especially for kitchens, upholstery and home office solutions. Cancelled travels have encouraged investments in one's own home, and the temporary reduction in value-added tax in Germany also had a positive impact. Christian Haeser, Managing Director of the “Handelsverband Möbel und Küchen” (Furniture and Kitchens Trade Association), reports an increase in sales of around one percent in the furniture, kitchen and interior design retail sector in 2020. In 2021, this could be increased by a further two percent. Furthermore, the segments kitchen, upholstery and home office solutions remain in strong demand, while a loss was reported for mattresses and garden furniture.
These numbers basically reflect the consumer behavior of the German population, which has already more than doubled its sales from 1991 to 2019. In 2019, 5.5 percent of the total spending was made on interior. However, investments are not short-lived: Germans hold on to furniture for around 18 years, which is one year longer than in 1991. The retention period for electrical appliances and major domestic appliances has also increased by two years to about 16 years per household.
There is a trend that does not stop at the furniture and interior design industry: online retailing. This can certainly also be attributed to the long-closed retail sector of the last two years. Retailers report a temporary increase of about 70 percent in online sales. This is confirmed by a review of the year 2020, when online retail generated 18 percent of the furniture industry's annual sales. However, as soon as the stores were allowed to open again, visitors queued up in the stationary trade. Offline purchases are primarily made by those who have specific intentions. And these customers often choose the higher-quality goods at the store. In the end, a "test sitting" of the sofa – even if already selected online – is just as irreplaceable as taking a physical look at the spacious refrigerator.
However, according to the current assessment, a continuation of the high is not to be expected, on the contrary: "There will be no way around raising prices," announced Jan Kurth, Managing Director of the German Furniture Industry Association (VDM), recently in an interview with the newspaper "Welt" with reference to significantly increased material, energy and logistics costs. And what if the end consumers don't want to pay the surcharge? Then the finished products would be delivered to the neighbouring countries of Switzerland, France and Austria. Last year, these countries already took about 1/3 of the German goods. So it remains to be seen whether the ongoing pandemic will also contribute to the furnishing boom in Germany and ensure a corresponding order volume.