Monthly Issue
From Home Furnishing Business
January 23,
2017 by Jane Chero in Business Strategy, Industry 
By Bob George
In the last year, there has been much discussion about the “last mile,” the delivery of product to the consumer. As the major e-commerce players have used free delivery as a differentiator, the traditional industry has had to respond. But this letter is not about delivery, but what happens in that 30-45 minutes between the sales associate greeting and the close before the delivery.
Obviously, it is important that we close the sale with fewer shoppers coming in and the need to achieve that 35% close rate. The pressure is on.
The question is what did we sell the customer? The focus of this month’s magazine is merchandising, the process in which we create the product that entices the consumer to move from a utilitarian purchase to an aspirational purchase. We are confident that the talent exists on the supply side to accomplish that task.
However, creating the product is only the first step in the process. The sales associates must close the sale. This raises an interesting question – What do we sell the consumer? The answer is not, “Whatever they will buy.”
Impact Consulting has just completed an interesting study focused on the age and income of the consumer who purchases specific price points by major product category. The study covered 500M+ transactions that represented $1.2b in sales from a national sample of traditional furniture retailers.
We naturally assume that the more affluent consumers purchase higher price point products. This was indeed the case 10-15 years ago. However, much has changed, especially since the Great Recession. The matrix above presents the percentage of purchasers by age/income for a stationary/fabric sofa at the $400 to $499 price point. As can be seen from the graphic, over 27% of this price point was purchased by consumers with household incomes over $100K. Must be a lot of basement playrooms!
Scary isn’t it? We obviously are not conveying value to the consumer or the consumer does not perceive value. How do we break the commodity cycle? More interesting findings in later issues.
January 23,
2017 by Jane Chero in Industry, Special Events
Ring In Your 2017 Retail Resolutions
By Tom Zollar
This is the two-year anniversary article for the Coach’s Corner Column and as predicted, 2016 was an exciting and eventful year for our nation, its economy and our customers. Obviously, the election caused a lot of drama and trauma, with many families and friends struggling with each other’s decisions. It appears that the shock to the economy has worn off a bit and the consumers are once again ready to buy products for their homes. We can only hope that the good economic news, such as a seven-year high for consumer confidence, continues and the government does not create any more hurdles than we already have in our path to business growth.
The goal of this magazine is to help our readers navigate these treacherous waters by providing critical information and so they can develop successful strategies for their business. To assist you with that process each year, the January Coach’s Corner article will review the last 12 months of columns to give you ideas about some Retail Resolutions you can create to help your business prosper in the coming year. What follows is a repeat of the positioning statements from last year’s February Resolutions column that introduced this process, plus a listing of the 2016 articles with a brief description of each one.
Most big-time sports teams have an off-season to reflect on what happened last year. Owners evaluate their players, their coaches and management based on the results they achieved. They study their game planning and personnel moves to determine how those processes dealt with the challenges of the last season. When done, they create a plan and set goals for positive change within the organization that will drive performance improvement. Year-in, year-out, the winningest teams are the ones that do the best job performing this process.
In our business we do not have the luxury of an “off-season” for reflection and planning, but that doesn’t mean we do not need to go through the process as much as a sports team does! It is every bit as important for us as it is for them, since historically the most successful businesses are also the best ones at reflecting, correcting and planning. They are always the most prepared for whatever the economy, the consumers and their competitors can throw at them.
Therefore, sometime in the first couple of months of each year, after we’ve gone through the hustle, bustle and distractions of the holiday season, owners, managers and staff need to take time to look back at how they performed last year and analyze what caused it to happen. Obviously you want to replicate or repeat those things that gave you a positive result and replace or rethink those that did not.
Most of you probably take the time to review your sales performance and set goals for performance improvement in that critical area. But do we do enough? A goal is not a plan; it is the result you want the proper execution of your plan to deliver. Many times we want growth and set targets for it without charting a new path to attain them. Einstein is credited with saying: “Insanity is doing the same thing over and over again and expecting different results.” Therefore, in order to get the desired improvement in results, we need to make changes. Selecting what changes to make is a very critical activity, so many just avoid it.
My hope here is to help you with that process. Each month for the past year we have presented you with an opportunity for positive change that will impact the sales side of your business. Each column targeted an area or process that many stores can improve and provided a brief overview of what could be done to make it happen. Looking back at our last twelve issues will give you a dozen ideas that could help you grow your business. Therefore, this “Dirty Dozen” is a great starting point for your planning process.
I recommend you review those that look interesting to you and select at least three to include in your sales improvement plan for 2017. They are presented in the order they were published, but that might not be how you need to approach them. Best to select those that are most important, then prioritize them based on urgency.
1. January 2016 – “Blueprint for Success” – Product knowledge and display are absolutely critical elements in the selling process for your staff. Do they have all the information they need to maximize their sales? When, who and how are new products being introduced to them? This is a great way to increase sales without spending a dime - improve your team’s communication about why something is on the floor and who would buy it.
2. February 2016 – “Retail Resolutions” – This was the first anniversary column that listed the previous 12 Coach’s Corner topics as referenced above. If you have not already gone back and reviewed those 2015 offerings to create your Retail Resolutions for last year, you now have twice as many potential game changing ideas you can look at for this year’s planning process!
3. March 2016 – “Selling Delivery?” – Since the delivery is the completion of the sale, the final touch so to speak, selling it and/or adding value to it, is something that should be part of the sales process. This article presents some points to help you improve how you add value to this service during the sales process.
4. April 2016 – “WOW ‘Em” – The in-store consumer experience is an area where retailers can differentiate themselves and become a true competitor in their market. You have already done something right by enticing the customer into the store. They believe you have what they want or they wouldn’t waste their time coming in. This article discusses a few critical considerations that could help you stand out from your competitors.
5. May 2016 – “Training the Team” – If we have not properly trained our staff to deal with today’s customer by breaking through their fears and resistance to gain their trust, then we will fail! Updated and effective Sales and Sales Management training is the answer for most retailers. So here are some ideas about how the approach, structure and content of your program can provide the best training for your staff to deliver the impact you desire.
6. June 2016 – “What is not measured cannot be changed” – We all tend to focus our goals and coaching efforts on total sales volume. However, the major problem with focusing on total revenue is that it is the end result of our efforts in so many areas within our business. Unfortunately, it is virtually impossible to improve a result if that is all you focus on! You just can’t “Coach” a result. You need to break it down into the individual factors that deliver what you want. This column presents some ideas about that process.
7. July 2016 – “Furniture Store Evolution and Tomorrow’s Leaders” - This column discusses that fact that given the proliferation of promotions, the commonality of product and the ever-growing consumer demands for service excellence, our systems, processes and facilities will need to keep pace with all the competitors, and so will your people. The key to that happening is state-of-the-art management skills and leadership. How do we develop them?
8. August 2016 – “Tracking the Sales Power of your Advertising Efforts” - Most retailers look at their sales metrics as only giving them the results of their selling effort. When in reality, virtually any sales report also provides great insight into how your advertising is delivering sales. This article looks at ways for you to use some existing sales metrics reports to help you improve the power and focus of your efforts in that area.
9. September 2016 – “How Can the Internet Support and Enhance your Selling Effort?” – Probably the single greatest impact on the entire retail landscape since the turn of this century has come from the introduction, growth and evolution of the Internet as both a research/educational tool and retail distribution channel. Here are some ideas on how to use it to help us instead of hurt us!
10. October 2016 - “Avoiding Some of the Pitfalls of New Technology” – Sometimes in our excitement and desire to embrace new ideas, we rush forward without properly considering if it is actually the best thing for us to do. Other times we might not have the discipline to properly implement a new program. This article discusses how to reduce the possibility of having an unintended negative result from bringing innovative new ideas, systems and/or processes into your selling organization.
11. November 2016 – “Two Opportunities for Improvement with Today’s Consumers in Our Stores” – We all agree that the consumer entering our stores today is far different than the ones our industry served 20 years ago, yet many of our staff are still using the same approach to selling them that they learned way back then. This column presents the two biggest things we need to change in the selling process to be more successful today.
12. December 2016 – “Future Focused” – This article is a great preparation tool for the resolution process that this current article presents because it talks about “How to Plan for a Better 2017” by setting goals and creating an Action Plan in all the areas that impact your sales success. Read it before you begin your planning and resolution setting process!
If you need any further advice or help with your plan or these “projects”, please feel free to contact me at: tomzollar@impactconsultingservices.com
You can find the Home Furnishing Business archive of past issues at: http://furniturecore.com/Default.aspx?tabid=676
January 23,
2017 by Jane Chero in Industry
Late last summer, Legacy Classic and its sister company, upholstery producer Craftmaster, began shipping the highly-anticipated Rachael Ray Home Collection, the cooking celebrity’s first foray into furniture.
The collection, which features imported case goods from Legacy Classic and domestically-made upholstery from Craftmaster, was well-received by retailers at the High Point Market, but results of the acid test – how many consumers are actually buying it – are just starting to come in.
To get an update on the line and the strategy behind it, Larry Thomas, senior business editor of Home Furnishings Business spoke with Legacy Classic President Don Essenberg and Craftmaster President Roy Calcagne. Calcagne and Craftmaster, it should be noted, are no strangers to licensed collections because Craftmaster has produced the upholstery portion of the successful Paula Deen Home line since 2009. (Paula Deen case goods are from sister company Universal Furniture.)
The Rachael Ray line consists of 100 case goods pieces, including bedroom, dining room, occasional, home office and home entertainment. There also are 12 upholstery groups with more than 50 sofas, loveseats, accent chairs, settees, chaises and ottomans.
Home Furnishings Business: What is the early feedback from retailers?
Don Essenberg: It has been fantastic. The consumer response has far exceeded anyone’s expectations.
Roy Calcagne: We’ve had phenomenal success right out of the gate. With a program like this, it normally takes three or four months on the sales floor before it takes off, but we’ll double the volume that we did with (the first year of) Paula Deen.
HFB: What competitive advantage does this line give your company?
Essenberg: It adds perceived value, and it ensures the collection is displayed together at retail.
Calcagne: It is a meaningful licensed brand that is designed to appeal to the consumer as an aspirational purchase. And it is designed to drive those consumers into the stores of our retail partners.
HFB: There are dozens of celebrities – living and deceased – who are available for licensing programs. Why did you pick Rachael Ray?
Essenberg: Rachael has millions of fans. Her Emmy Award-winning television show is broadcast five times a week. She has a very successful line of cookware, so we don’t have to explain who she is as part of our marketing. And I believe Rachael has yet to peak. We’re not partnering with someone at the end of their career. Finally, she has a real passion for furniture.
Calcagne: Rachael is one of the best-known brands in the country. She connects to the target consumer from a demographic standpoint, she has a top-rated TV show, she has a very successful monthly magazine, a strong social media presence and is already in the home due the fact that she is a celebrity chef. So the connection from the kitchen to the living room, bedroom and dining room is easily made.
Craftmaster has also had tremendous success with the Paula Deen Licensed Collection with sister company Universal Furniture. The Rachael Ray Collection is much different as far as the target consumer to which it appeals. The styling direction and fabric selections are very different, and there is little cross-over between the target consumers.
HFB: What consumer demographic are you targeting?
Essenberg: Her fans. It’s primarily women between the ages of 35 and 55 with a household income of $50,000 to $75,000. Rachael has a national following.
HFB: Is the line being promoted on her television show and on social media?
Essenberg: Rachael’s passion for the home is evident in every connection she has with her fans. Her furniture is the furniture on the set of her show. Rachael’s enthusiasm is evident on her show and social media. Rachael has already given away houses full of furniture as featured on her show.
Calcagne: She has mentioned the collection on several episodes during the year, along with the May 11th episode, which pretty much filled the entire show. It was basically a 45-minute program about the Rachael Ray Home line. All of the furniture on her CBS set is now from the Rachael Ray Home Collection — upholstery and case goods.
HFB: What is the inspiration for the designs?
Essenberg: Rachael’s life. All three current collections are a reflection of how and where she lives. Rachael wants her furniture to solve problems and make life easier.
Calcagne: Capturing her lifestyle is paramount to the collection. We have two city collections that epitomize how she lives in New York, and the Upstate Collection that represents her retreat home north of the city. The design direction for the upholstery is a collaboration between Rachael and her team along with the Craftmaster merchandising/product development team
HFB: What is the level of Rachael’s personal involvement?
Essenberg: Rachael is fully engaged. She approves every item, every finish, even the hardware. This is her furniture. It’s a real partnership.
Calcagne: She is very involved from a design and fabrication standpoint. We take her input and start developing the styles. She also reviews the fabric selections and makes recommendations and suggestions. And since the upholstery is made here in North Carolina, the made-in-USA story is very important to her. She often mentions how important it is for American jobs.
HFB: Has the program enabled you to open many new dealers? Or are existing dealers giving you more floor space?
Calcagne: Both. We have expanded our assortments with the current Craftmaster (retail) customer in addition to adding many new dealers due to the tremendous product offering and value along with the power of the brand. It fits in the upper moderate price range below Paula Deen and above the regular Craftmaster line.
January 23,
2017 by Jane Chero in Mattresses, Product
Despite a sometimes sluggish 2016 and an especially tough third quarter, the bedding industry continues to entice consumers with everything from hybrid mattresses that combine innersprings and specialty foam to ultra-plush pillowtop models that dissipate body heat to keep sleepers cool.
Most executives believe the previous year was something of an aberration, caused by the lengthy, heated U.S. presidential election, uncertainty surrounding the combinations of some of the industry’s biggest brands, and temporary turmoil spurred by the consolidation of several large mattress specialty retailers.
But executives say they aren’t deterred, and they’re not holding back on the product introduction front at this month’s Las Vegas Market, when more than 100 showrooms will have new mattresses, foundations, adjustable bases, and a variety of sleep accessories on display.
“The bedding market is still being driven, to some extent, by the commodity (product) strategies of manufacturers and retailers, but if you can stay above that, business is still pretty good,” said Kevin Damewood, executive vice president of sales and marketing at Kingsdown.
The January market at Las Vegas has become the key bedding market of the year because that’s when producers launch the overwhelming majority of their new products. Unlike their colleagues in the case goods and upholstery categories, mattress producers don’t feel compelled to have product introductions four times a year – twice in High Point and twice in Las Vegas – and a number of manufacturers no longer have showrooms in High Point.
According to revised figures compiled by Impact Consulting Services, parent company of Home Furnishings Business, bedding shipments totaled $3.67 billion in the third quarter, a drop of 2.4% from the third quarter of 2015. That represented the first quarter-over-quarter decline since the Great Recession, and since fourth-quarter figures aren’t yet available, it’s not clear if the industry had a positive year.
For the first nine months of 2016, shipments were just 0.9% ahead of the same period in 2015, according to the research.
Kevin Toman, president of Englander, said he believes many of the industry’s second-tier brands (such as Englander) are performing better than the four largest brands because of the consolidation involving Simmons and Serta, who are under common ownership, as well as Sealy and Tempur-Pedic, both of whom are owned by Tempur-Sealy International.
In addition, he said consolidation at retail, which has been driven by acquisition-minded Mattress Firm, has negatively impacted the larger brands more than the second tier.
“The industry is in chaos right now … and I think the second-tier brands are gaining market share,” Toman said. “There’s a real opportunity for brands like us.”
Toman, Damewood and other executives say hybrid mattresses, which combine innersprings and specialty foams such as latex or memory foam, are still selling briskly, as is just about any mattress designed to keep sleepers cool through the use of gel-infused foam or specialty fibers that direct body heat away from the mattress surface.
However, Damewood said Kingsdown is having particular success with its proprietary Sleep To Live diagnostic system, which gives consumers a mattress recommendation after lying down on a diagnostic mattress that makes numerous calculations about pressure points around the body.
Consumers who make a purchase after using the diagnostic system typically spend $2,499 and up, he said, noting that the system now accounts for about 40% of the company’s sales.
A survey of recent mattress purchasers by Impact Consulting asked consumers, among other things, what type of mattress they bought. More than half (53.31%) said innerspring and another 35.67% said memory foam. Only 7.65% said latex foam and 3.36% purchased an air bed. No one admitted to buying a waterbed.
When asked what other mattress-related products they purchased, 54.5% said they bought a box spring or other non-moving base, and 51% said a mattress pad. Nearly 40% said they bought at least one pillow and 35.4% bought a bed frame, according to the survey.
The survey also said only 4.45% also purchased an adjustable base, a figure that surprised many industry executives, given the popularity of the product in recent years and the entry of numerous vendors in the category.
Specialty sleep products supplier Glideaway, for example, said sales of its Comfort Series Lifestyle Base have nearly tripled in the past two years as the company has brought out numerous new designs.
“Glideaway has become a significant player in the adjustable base business in a short amount of a time,” said Dan Baker, executive vice president of sales. “The options we continue to offer across our Comfort Base line are really resonating with consumers. We are excited about our upcoming additions to the line that we’ll unveil at the Winter Las Vegas Market.”
In addition to raising the head of the bed to an almost infinite number of sleeping positions, many adjustable bases have a wide range of other features such as charging stations, massage, pre-programmed settings and even Bluetooth speakers.
When asked where they made their mattress purchase, bedding specialty stores were the runaway winner at 43.2%. Traditional furniture stores were next at 24.55%, and no other format captured more than 10%.
Registering under 10% were mass merchants (8.95%), department stores (8.75%), the Internet (7.85%), and wholesale clubs (6.65%).
And while gel-infused foam is now offered in some mattresses by virtually every manufacturer, the survey showed most consumers didn’t know why it’s there. Less than half (46.75%) answered correctly and said it would make the bed cooler.
Another 26.8% said it would add more support, and 20.85% said it would make the bed softer. And 5.65% said it would make the bed warmer.
The survey also showed 24.555% paid $1,000 to $1,999 for their new mattress, the exact percentage that said they paid $600 to $999. Another 22.235% said they paid $300 to $599, and 13.29% said they paid $2,000 to $2,999. Only 8.9% paid $99 to $299, and 6.67% paid $3,000 or more.
Therapedic’s Medicoil HD 5000
The HD 5000 (HD for heavy-duty) is part of a four-model lineup designed for firmness and durability. In addition, it’s nearly totally resistant to body impressions, which addresses a common complaint among consumers buying a pillowtop mattress. Suggested retail is $1,799 in queen.
Tempur-Pedic’s Tempr Cloud Supreme
Designed to be soft on top, but with a supportive core, it features extra-plush top layers of the company’s proprietary memory foam that give it a pillowy feel without a traditional pillowtop design. The core includes additional layers of its proprietary foam that adapt to the sleeper’s weight and shape. Suggested retail is $2,499 in queen.
Sealy’s Posturepedic Premier Hybrid
This best-seller features a mattress that’s half foam, half springs. Memory foam is on the top layers for body-conforming comfort, while specially engineered springs underneath the foam deliver full body support. Suggested retail is $1,399 in queen.
Simmons Beautyrest Black Katarina
This plush pillowtop model put the focus on keeping the sleeper not only comfortable, but cool. Features include a fiber that dissipates heat away from the sleeping surface, a memory foam infused with diamond particles, and a second type of memory foam that relieves pressure points for freedom of movement. Suggested retail is $2,599
Restonic’s ComfortCare Hybrid Signature
Featuring two types of memory foam in the top cushioning layers, this mattress is designed to absorb, store and release heat as needed to keep the sleeper cool and comfortable. The foam layers sit above Restonic’s signature Marvelous Middle innerspring design, which utilizes individually wrapped and zoned coils to minimize motion transfer.
Pleasant Mattress’ Maxx Response Luxury Plus Hybrid
This model features a proprietary 3Mesh ventilation system, Serene foam and Leggett & Platt’s Samson wrapped coil innerspring unit. The company describes it as a “stunning lifestyle product with a tremendous comfort experience.” Suggested retail is $1,999 in queen.
Organic Mattress Inc.’s Duo
The Duo has been a winner for OMI for more than eight years because it allows each sleeper to customize the feel of the mattress. The premium model features three layers of GOLS-certified organic natural rubber that are individually encased in GOTS-certified organic cotton sleeves. Each layer is labeled with their firmness to allow for easy adjustment for comfort and pressure-point relief. Suggested retail is $6,545 in queen.
Kingsdown’s Crown Marquis
From the Crown Imperial collection of hybrid mattresses, this model features multi-level coil construction with layers of micro-coils and a layer of tri-zone wrapped coils to reduce motion. The springs are topped with gel-infused memory foam to keep the sleeper cool. The ticking is a blend of silk and wool for a luxurious hand. Retail price points for Crown Imperial models range from $1,999 to $3,999 in queen.
Classic Brands’ Cool Gel
At 10.5 inches high, the Cool Gel mattress offers a compelling combination of pressure relief support and thermal temperature regulation through gel-infused foam at a promotional price point. Suggested retail is $399.
E.S. Kluft’s Aireloom Sidestich
Part of the Aireloom Karpen Collection, Sidestitch mattresses are constructed with more than 45 pounds of natural cotton, feature more than 560 heritage side stitches and the company’s proprietary designed coils that curve heavy gauge metal into delicate inner springs for reactive support to deliver premium, all-night rest.
Boyd Specialty Sleep’s Broyhill Memory Foam
Made under a licensing agreement with Broyhill parent Heritage Home Group, this 8-inch memory foam mattress sits on a fabric-covered adjustable base with a remote control.
Spring Air’s Grand Award
The company’s flagship Back Supporter line includes this Grand Award model, which features a European waterfall design and retails for $999 to $1,499 in queen.
January 23,
2017 by Jane Chero in Economic News, Financial Reports, Industry
The Consumer Price Index is defined by the Bureau of Labor Statistics as the measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. The CPI-U (Consumer Price Index – Urban Consumers) represents all urban consumers, about 89 percent of total U.S. population. This article focuses on the Consumer Price Index from 2010 to 2016. To interpret the CPI note that the base year indexes is always shown as 100. The index for subsequent years indicates the percentage growth over that base year. For example, an index in the year 2013 of 119.3 indicates the price of that consumer item has grown 19.3 percent since the base year of 2010. On the other hand, an index of 86.2 indicates the price of that item has fallen 13.8 percent. Each year represents the growth over the base year.
The prices of consumer items grew steadily coming out of the recession for virtually all broad product categories until 2012 to 2014, when Durable Goods, including furniture, appliances, and electronics, along with Non Durables, and Commodities began to decline. The Services sector, led by skyrocketing medical costs, is the only broad group continuing to see large price increases.
According to the Bureau of Labor Statistics, the Consumer Price Index (CPI) for all consumer items increased 9.9 percentage points over the last six years – an average of 1.6 percent a year. Meanwhile, the purchasing power of the dollar decreased with time – declining 9 percentage points since 2010 (Table A) Durable Goods has been the worst performing sector in price growth compared to Non Durables, Services, and Commodities (Table B).
Durable Goods prices grew slightly coming out of the recession, but began declining in 2012, and this year are 3.3 percentage points below 2010. With a constant upward trajectory, the price of all consumer Services has increased 14.4 percentage points from 2010 to 2016 –due in part to escalating medical costs.
Housing
Except for home furnishings and operations, housing and home energy costs have grown over the past six years. Both Rent and Home prices have crept up an average of 3 percent (Rent) and 2 percent (Homes) a year – resulting in overall growth of 18.6 and 15.7 percentage points. And while Household Energy prices peaked at an index of 106.8 in 2014, prices quickly fell back down this year to just 1 percent growth since 2010. With Rent and Home prices growing, consumers may have fewer disposable dollars available for Household Furnishings and Operations which are both below 2010’s index by 2.9 percent (Table C).
Furniture and Home Furnishings
Focusing on Household Home Furnishings prices, the accessories category (Clocks, Lamps, and Decorator Items) has the most negative price growth – dropping 29.1 percentage points since 2010 (Table D). Major Appliances is second with a 13.9 percent decline. Furniture and Bedding, Window Coverings, and Floor Coverings all experienced slightly less negative growth – falling between 3.9 percent and 8.8 percent from 2010 to 2016.
Furniture Products
The CPI breaks Furniture into three broad categories – (1) Living Room including Upholstery, Kitchen, and Dining Room, (2) Bedroom including Bedding, and (3) Other Furniture. All three categories are down in price from 2010 (Table E). Bedroom Furniture experienced small price increases leading up to 2012, most likely via Mattresses, but has declined steadily in price since then. Currently Bedroom and Bedding is down 4.9 percent from 2010 prices. Living Room, Kitchen, and Dining Room Furniture peaked at 102.1 index in 2012 before falling to 96.1 this year, a level 3.9 percent below 2010.
Television and Cable
In many electronics categories, the price of the durable good has fallen while the cost of operating that product has increased. For example, Television prices have dropped dramatically, but the cost of programming services has skyrocketed. The price of televisions has fallen 65 percentage points since 2010 or about 16 percent a year. During the same time period, Cable and Satellite Television and Radio Services have jumped a total of 17 percentage points – a roughly 4 percent yearly increase (Table F).
Computer and Electronic Services
Similar to Televisions, Personal Computer prices continue to fall – down 41.6 percentage points in six years (Table G). Surprising to some, Wireless Telephone Service prices are also down, while Internet Services have stayed steady with a slight increase of 0.5 points from 2010 to 2016.
New Vehicles and Gas
New cars and trucks is one Durable Goods area that has seen steady price increases, up 6.8 percent since 2010 (Table H). On the flip side, however, is that while cars have become more expensive, gasoline prices have become cheaper. Gas prices peaked in 2012 at levels 30.8 percent above 2010, but began their decline three years ago. In 2016 the price of gasoline is down 23.4 percent down from 2010.
Food and Beverages
Food, both groceries and restaurant prices, have experienced overall growth from 2010 to 2016 (Table I). Food away from home showed the most growth – increasing 16 percentage points.
Medical and Drug Prices
By far the largest increases in prices come from the Medical Industry (Table J). Aside from Health Insurance which has fluctuated since 2010 with the introduction of Obamacare, all medical services and drug prices have maintained an upward trajectory. Hospital Care alone is up to 30.5 percent in 2010 to 2016. All other physician services, dental services, and prescription drug costs have grown between 16.5 percent and 22.8 percent. Even medical care for your pet is skyrocketing growing over 20 percent since 2010.
Education and Childcare
As shown in Table K, education for all ages along with childcare costs are close behind medical care in services that have sharply increased over the past six years. Up to an index of 126.1 in 2016, College Tuition and Fees have jumped an average of 4 percentage points per year. Consistently on an incline, childcare has increased 14.6 percent points from 2010 to 2016.
The Consumer Price Index clearly shows how consumers are faced with growing prices in the Services area but over the last two years have seen overall declines in durable and non-durable goods. The problem for the home furnishings industry is that prices have been consistently falling since 2012 which may be good for consumers, but not so good for the retailer.