Households across the UK may be tightening their belts as the credit crunch begins to bite and rising prices hit the family purse strings, but parents are still prepared to splash the cash on the kids.
That’s the view of one of the UK’s leading retailers of children’s furniture, which is experiencing a double digit sales growth in 2008, at a time when other retailers are bearing the brunt of the downturn in consumer spending.
Aspace, an online children’s furniture store, is bucking the trend in retail and puts its fortunes down to the fact that it sells products for children rather than being a furniture retailer.
It may only seem to be a case of semantics but there is a massive gulf between the two, according to managing director, Paul Cunningham.
?As a business we have kept a very close eye on factors which are having an impact on market sector, as well as the wider economy, and it is clear that there is a huge difference between the purchase motives for the different types of furniture,? he said.
?We have studied the data and the main conclusion that we have drawn is that parents will, within reason, cut back on a number of purchases but not ones which affect their children. The idea is not as crazy as it first seems because all our research and data points to the fact that parents would much rather forego a new sofa, bedroom furniture or a dining room suite because they are prepared to make do with what they?ve got in favour of spending the money on their children.
?In those terms, there is a certain logic to the argument which does help to explain why is seeing business growth this year.?
Cunningham believes that his company’s current trading situation fits into a widely accepted business wisdom which says that there is a natural sequence in which retailers begin to suffer at times of economic downturn.
According to such wisdom, it is believed that furniture retailers are the first to be hit. Then it’s men’s fashion followed by women’s. And only then, when a recession kicks in, does spending on children and food begin to drop away.
A number of leading business figures have alluded to this cycle recently, said Cunningham, and he is convinced that his company is seeing this effect at first hand.
?It has been gratifying to see business leaders confirming what we are seeing in our business,? he said.
?And given the fact that things are slowing down, this often presents its own opportunities. Just look at the housing market for example. Whilst the housing market is a nightmare for the poor souls who need to buy or sell at the moment, the rising number of ‘stay-put homeowners? is stimulating a number of different markets, including ours.
‘rather than losing thousands on the property market, many homeowners are opting to ride out the storm and stay where they are. And because they are staying put, they are spending a few pounds on their home to spruce it up. They might choose to make cosmetic changes in areas such as kitchens or living rooms but in areas like children’s bedrooms they are tending to go for a more significant overhaul including new furniture.?
As well as the rise in stay-put homeowners, Aspace points to another factor which is helping his business: the poor supply of quality children’s furniture and trading up. Poor supply was the whole reason we started the business,? said Cunningham. ?We spotted a big gap in the market for better quality products.
?Yes of course the likes of B&Q and IKEA make very good products which are pitched perfectly in terms of price and the market they are aiming for. But they don’t go above and beyond that. Until we came along there was no one who was offering better quality furniture.
?We have exploited the niche to great effect in recent years because there is growing demand for better quality products. And as a result of offering a better choice of quality products we have seen an increase in households trading up from the perfectly adequate furniture from the big retailers to something better from us.?
All these factors could go some way to indicate that parents are pampering their children like never before, but Cunningham is quick to point out that it more likely reflects parents? well placed intention to do their best by their children.
‘there is probably an element of parents wanting their child to have all the opportunities in life that maybe they didn’t have and the physical environment in which they live ? especially their bedrooms ? does go a long way to helping achieve that.
?After all, a recession won’t last forever but this part of a parent’s journey with their child will never come around again.?