Britain’s biggest sofa retailer DFS has brought forward its Boxing Day Sale, sparking fears of a furniture sector price war.

The sofa giant is offering a range of discounts and chief operating officer Jon Massey said the decision to bring forward the Sale was not directly linked to the VAT hike, but it “may well be on people’s minds”.

He added: “In the circumstances we felt it appropriate to do it now.”

Other furniture big hitters including beds specialist Dreams and Dolphin Bathrooms owner Homeform are using the VAT rise in their ad campaigns to draw in shoppers.

One executive of a large furniture retailer said there will be a “fierce battle” in the sector this year, as rivals fight for their share of collapsed businesses like MFI and Land of Leather.

Pragma Consulting chairman Roy Palmer said bringing Sales forward was “extremely logical”. He added: “If a large retailer like DFS does it, they’ll all have to do it. It will make the market more competitive.”

DFS rival ScS Upholstery is holding out until Boxing Day for its Sale. One furniture executive said shoppers will benefit if they wait until all retailers are on Sale as there will be more choice and greater price cuts.

Dreams’ ‘Britain’s Biggest Ever Bed Sale’ hinges on the tag line  “Beat the VAT increase”, while Homeform, which also operates Sharps bedrooms and Möben kitchens, is offering promotions on some lines, and asks customers to “Book now to beat the VAT increase”, although it has not brought forward its main Sale.

VAT is paid upon delivery, so those offering VAT at 15% now will have to pay the extra 2.5% themselves, upon delivery in the new year.

New Habitat owner acts

Habitat is considering pulling out of Spain and closing a handful of UK stores as it seeks to realign the business under new owner, Hilco-backed Retail Investments.

One source said Spain was underperforming and there are “three or four badly loss-making stores” in the UK that Habitat would “love to get out of”.

The source said Habitat was performing “extremely strongly”, with like-for-likes soaring 24%. They added that there would be an “absolute focus on numbers”.

Hilco acquired Habitat from the Kampard family, who wrote off debts and provided working capital of €50m (£45.1m). However, some observers fear that Hilco could break up the business.

Chief executive Mark Saunders – who will remain in his position – and Hilco were unavailable for comment.