Monthly Issue
From Home Furnishing Business
Statistically Speaking: Are You Better Off Now Than You Were in 2019?
July 24,
2024 by HFBusiness Staff in Business Strategy, Industry 
While furniture store sales surged during the pandemic, the reality of inflation set in beginning in early 2021. As shown in Table A, the indexed real dollar growth in furniture store sales, adjusted for inflation, has been in free-fall since that time. By the end of the first quarter of this year, furniture store sales in real dollars had dropped just below their level five years prior (2019 Q1). Note: All table elements are shown indexed to 2019 Q1 = 100.
The real growth of wages, adjusted for inflation, are also shown in Table A. Even after inflation, wages still increased much faster than furniture store sales, especially in 2022. However, last year real growth in wages slowed and by the first quarter of this year had dropped sharply to an index of 100, exactly where we were in 2019 Q1 before the madness began.
On an annual basis, furniture store sales grew 17.1% between 2019 and 2023. But that growth is misleading because much of it occurred during a rebound from COVID-19 and in a highly inflationary period. Quarterly furniture store sales comparing current dollars to real dollars are shown graphically in Table B. Current 2024 Q1 furniture store sales of $17.3 billion only amounts to $14.7 billion in real inflation-adjusted 2019 dollars, which happens to be about the same as current sales in 2019 Q1. No progress. Furniture stores have been forced to keep up with other industries in increasing wages. And those wages have stayed well above 2019 levels in current dollars, and are up slightly in real inflation-adjusted wages. Table C shows that weekly wages totaled $759 in 2019 Q1 and rose 23.3% by 2024 Q1 to $935. After adjusting for inflation, weekly wages were up .4%.
Why are weekly wages falling faster than hourly wages? Table C shows that in the first quarter of this year, weekly furniture store workers averaged 33.5 hours, 1.2 hours below 34.7 hours in 2019 Q1. And while 1.2 hours a week doesn’t sound like much to the average reader, when hourly wages are going up and sales are going down, many furniture stores see the natural next step to be to cut weekly hours. And that is exactly what is happening in furniture stores. The final result is that furniture stores sales and weekly wage costs are exactly where they were five years ago, 2019 Q1 to 2024 Q1, but hours worked are down.
Another key part of the equation is that while sales are declining, wages increasing, and weekly hours worked per employee down, the number of workers in furniture stores is falling, whether by attrition via stores closing or current retailers trimming rosters. (Table E).
One thing is certain, the average quarterly furniture store sales per employee increased beginning in 2020 Q3, and has not returned to 2019 Q1 levels, both in actual (current) dollars and also dollars adjusted for inflation. Between 2019 Q1 and 2024 Q1, in current dollars average employee sales grew from $65,000 and $84,000 per quarter, an increase of 29.1%. In real dollars adjusted for inflation the growth was 9.7%. (Table F) The boom in the furniture industry since 2019 came to a slow end over 2023 and the decline gained speed in the first quarter of this year. As shown in Table G, furniture store sales grew 17.1% between 2019 and 2023, even as 2023 slowed. Last year, sales fell 5.8% (2022 to 2023). And in the first quarter of this year, sales fell another 6.7% compared to Q4 of 2023. From a different quarterly year-over-year view, Q1 2024 versus Q1 2023 declined 8.7%.
Meanwhile the growth in employment, which was previously detailed in Table E, showed a continuous decline throughout the last four years and into the first quarter of this year. The four years 2019 to 2023 saw employment fall 6.6% and in the first quarter of this year by 5.2% Q1 2023 to Q1 2034 (Table G). Furniture Stores sales growth has fallen way behind other channels as consumer spending on furniture has slowed, but to a much less extent (Table H). Consumer spending growth between 2019 and 2023 of 39.7% was more than double the sales growth in furniture stores, 17.1%. In the first quarter of this year, the growth was even more pronounced. In 2024 Q1 versus the same quarter in 2023, consumer spending on furniture was down 2.98% compared to furniture store sales growth of a negative 8.7%.
Competing Distribution Channels So how have other retail channels that sell furniture fared? Some better, but some worse (Figure 1). Between 2019 and 2023 the following retailers fared much better than furniture store growth of 17.1%: Electronic shopping (88.5%), building material and home centers (32.9%), warehouse clubs and superstores (29.2%), and general merchandise retailers (30.5%). Slowest growth was among electronic and appliance stores (1.2%) and department stores (-1.5%). Beating furniture store employment growth of (-6.6%), the biggest winners in employment were lawn and garden equipment and suppliers’ growth (18.2%), warehouse clubs and superstores (12.5%), and building material and home centers (8.0%). Employment data from electronic shopping is not available. Employment losers were home furnishings retailers, excluding floor covering stores (-22.1%) and electronic and appliance stores (-15%). Growth in both sales and employment has slowed significantly in the first quarter of this year.
