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Ikea poised to overtake MFI as UK favourite

IKEA, THE Swedish store group that has been urging the UK to stop being so British, is poised to overtake MFI as the country's most popular supplier of furnishings.

The British company has been branded "unimaginative" and "slow to respond to consumers' desire for more contemporary styles and higher quality designs" as reflected in the popularity of such television shows as the BBC's Changing Rooms, presented by the vivacious Carol Smillie. So said Verdict, a specialist consultancy, in a survey of the sector being published today.

Although the UK company is still the market leader, rival groups such as Ikea and Argos have benefited from MFI's sluggishness and, as a result, the firm's market share has fallen from 11.6 per cent in 1995 to 8.4 per cent in 1998.

A spokesman for MFI said: "We would not take issue with the numbers, but there is a question mark over Verdict's interpretation of these figures."

He said the fall in the company's market share came after the firm de- listed 7,000 of its 12,000 products in order to focus on the profitable kitchens and bedrooms sectors.

Verdict says consumers fuelled with ideas from magazines and television home improvement programmes such as Changing Rooms are seeking more informal styles that contrast with the traditionally conservative UK market, where darker woods, patterned textiles and more cluttered looks prevail.

Verdict warns: "UK players should sharpen up their acts lest more innovative Continental and American operators should follow the lead of Ikea and steal market share from under their noses."

Verdict forecasts that the furniture sector will enjoy a boom in the second half of 1999 because of the effects of an increase in housing transactions, the millennium feelgood factor and latent demand due to purchases deferred from last year, when total furniture sales were pounds 9.4bn.

MFI has become a prime takeover target after the company's full-year profit fell 70 per cent as the cost of trimming back product lines compounded a general drop in consumer demand.

Verdict also criticises floorcoverings companies such as Carpetright and Allied Carpets.

The report says these retailers have failed to move with their market. Demand has been growing for hard floorcoverings but, according to the research, there is an absence of a dedicated, broad-focused specialist offering customers a competitive pricing proposition for these products.

Verdict says the floorcoverings sector is set to recover from a slow period this year because most people replace their carpets every five to seven years and the last buoyant year was 1993.

Consumer spending in this sector fell by 3 per cent to pounds 2.3bn in 1998.