Sofa sales slump as consumers feel the pinch
By Laura Enfield | 16th September 2022
Consumers are feeling the pinch in their pockets but also their bottoms as sofa sales slump.
DFS has reported a significant drop in profits and said sales are down as consumers forgo new furniture in favour of paying their bills.
The retailer, which has a store in Gallagher Park in Cheltenham, posted underlying profits of £60.3 million for the financial year to the end of June. The figure was down from £109.2million during the previous year.
The business said pre-tax profit dropped 43 per cent to £58.5 million in the same period.
DFS said order numbers have "softened markedly" in the last quarter of the financial year and the first three months since the year-end as the cost-of-living crisis hits consumer confidence.
It said this reflected a trend seen "widely across the furniture industry".
Tim Stacey, chief executive of DFS, said: "This has been the most operationally challenging year that we can remember, with industry-wide Covid-related supply chain issues, double-digit cost inflation on raw materials and ongoing colleague absence and skill shortages."
The retailer warned that sales volumes across the industry could slump by 15 per cent in the current financial year compared with pre-pandemic levels.
That would slash its profit to as little as around £20million, even as the business said that its revenue would continue to grow, although this is the worst-case scenario that DFS presented to shareholders.
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