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Factoids

Factoids offer brief snapshots of current topics pertinent to the Furniture industry based on our on-going research. Increase your grasp of current trends, consumer attitudes, and shifts within the industry through solid statistics and concise insight.

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Factoids

Consumer Spending: Personal Consumption of Services “Lifestyle Expenditures” 2000 to 2015 Q1



This is the third in a series of five Factoids detailing Consumer Spending. Consumers are spending an increasing amount of money on Consumer Services and “Lifestyle Expenditures” – leaving fewer dollars for Furniture and other durable and non-durable goods.

 

Consumers were faced with increasing costs of Housing and Healthcare on smaller budgets during the Great Recession. Factoid #3 shows the rise of Consumer Services expenditures from 2000 to 2015Q1. Like Housing, Healthcare expenditures have grown exponentially - increasing 126 percent in 15 years. Although dropping slightly in 2009, money spent on Food Services and Accommodations and Recreation increased by 93 percent and 77 percent. Consumers decreased spending on Transportation during the recession by 7 percent, but have grown 21 percent since 2009.

 

The final two factoids in this series will show how as the economy recovers and budgets increase, sales of home furnishing products are rising alongside Consumer Services expenditures.


 

Consumer Spending: Index Growth Comparison of the Personal Consumption of Housing and Furniture 2000 to 2015 Q1


This is the second in a series of five Factoids detailing Consumer Spending. Consumers are spending an increasing amount of money on Consumer Services and “Lifestyle Expenditures” – leaving fewer dollars for Furniture and other durable and non-durable goods.

 

Money spent on Housing, including rent, utilities and other vendor services related to housing costs, has risen at a rapid pace since 2000 – up 85.6 percent in 2015 Q1 while consumption of Furniture rose just 33.3 percent.

 

Unlike Furniture, which felt the impact of the Recession – dropping 11 percent in 2009, Housing services expenditures only slowed its upward momentum. On a positive note, Furniture has risen 20 percent since the peak of the recession, while Housing increased 18 percent.


Source: U.S. Department of Commerce, Bureau of Economic Analysis, “Personal Consumption Expenditures”


Consumer Spending: Durable Goods Losing Ground to Consumer Services Percent of Durable Goods, Non Durable Goods, and Services: 2000 to 2015 Q1 (Annual)


 

This is the first in a series of five Factoids detailing Consumer Spending. Consumers are spending an increasing amount of money on Consumer Services and “Lifestyle Expenditures” – leaving fewer dollars for Furniture and other durable and non-durable goods.   

 

Consumer demand for Services (mostly housing expenses and utilities as well as healthcare) have increased their share of personal consumption expenditures over the last 15 years as Furniture (falling under the Durable Goods category) has decreased.

 

This Factoid shows the shifting of Goods and Services from 2000 to 2015 Q1. Services added 3.7 percent to its share of personal consumption, while Durable Goods, including home furnishings, motor vehicles, appliances, televisions etc., fell 2.5 percentage points. Non-durable goods, like food and clothing, as a group also lost 1.7 percentage points.

 

 

Source: U.S. Department of Commerce, Bureau of Economic Analysis, “Personal Consumption Expenditures”

 

Distribution Channels: Percent of Sales by Distribution Channel by Product

This is the fourth factoid in a series detailing the Furniture Industry’s Distribution Channels.  Factoid #4 shows the percentage of products sold in each distribution channel.

 

Furniture and Home Furnishing Stores.  Traditional furniture stores along with specialty furniture retailers and home furnishings stores sold almost equal amounts of Upholstery (35.9%) and Living Room, Dining Room, and Bedroom (32.7%). Bedding is also a staple item in this channel at 23.2% of Furniture and Bedding sales, while there were fewer sales of Home Office and Computer Related (5.2%) and Outdoor and Patio (3.0%).

 

Electronic Shopping (Internet).  Although the highest percent of Furniture and Bedding sales in Electronic Shopping belongs to Living Room, Dining Room, and Bedroom Furniture at 32.7%, the other 4 main products are all between 14.0% and 19.1% of this distribution channel’s total sales.  The distribution of sales of each main furniture category is the most balanced in the Electronic Shopping.

 

Warehouse Clubs and Supercenters.  These big box stores sell a mix of Home Office and Computer Related (36.1%), Living Room, Dining Room, and Bedroom (35.3%), and Outdoor and Patio (25.7%).  Very little Bedding (1.7%) and Upholstery (1.2%) is sold through this channel. 

 

General Merchandise Stores.  The five main furniture categories are well distributed in General Merchandise Stores with Upholstery being the majority at 34.7% and the exception of Home Office and Computer Related Items only contributing 2.8% of sales.

 

Discount Department Stores.  The vast majority of Discount Department Store furniture and bedding sales occur in the Living Room, Dining Room, and Bedroom category at 86.5%. Outdoor and Patio are 10.4% of sales, while the remaining products are 3.1% combined.

 

Home Centers.  Outdoor and Patio furniture is mostly sold in Home Center and Other Building Material stores – accounting for 56.2% total furniture and bedding sales in this channel.  The channel also sold 20.8% in Living Room, Dining Room, and Bedroom and 14.5% in Home Office and Computer Related items. 

 

Department Stores.  Bedding is still the largest segment of furniture products sold in Department Stores at 56.3% of product mix. 

Other product mixes include 17.5% of sales in Upholstery, 15.8% in Living Room, Dining Room, and Bedroom, and 10.3% in Outdoor and Patio. 

 

Distribution Channels: Percent of Sales of Product by Distribution Channel


 

 

This is the third factoid in a series detailing the Furniture Industry’s Distribution Channels. Factoid #3 determines the percent of sales of a product by each main distribution channel.

 

Upholstery.  The vast majority of Upholstery is sold in Furniture and Home Furnishing Stores– 83.9% in 2012.  8.6% was sold through Electronic Shopping, while General Merchandise stores accounted for 4.2% of Upholstery Sales.  The remaining distribution channels each made up less than 1.5%.

 

Casegoods.  With 60.4% of Living Room, Dining Room, and Bedroom Furniture Sales, Furniture and Home Furnishing Stores are the primary distribution channel for these products. 14.4% are also sold through Electronic Shopping, while 7.0% sells in Discount Department Stores and 4.0% in Warehouse Clubs and Supercenters.

 

Home Office and Computer.  The primary source of Home Office and Computer Related Sales are divided between Furniture and Home Furnishing Stores at 35.3%, Electronic Shopping at 31.0% and 15.1% sold in Warehouse Clubs and Supercenters.

 

Outdoor and Patio.  The majority of Outdoor and Patio sales were sold online making Electronic Shopping 33.8% of distribution.  23.0% of sales occurred in Furniture and Home Furnishing Stores, 15.0% in Home Centers and Other Building Materials, 11.9% in Warehouse Clubs and Supercenters and 9.4% in General Merchandise Stores.

 

Bedding.  Like Upholstery, Bedding is mainly sold in Furniture and Home Furnishing Stores, which include Specialty Bedding Stores, with 78.2% of sales, followed by Electronic Shopping at 11.5% and Department Stores at 5.8%.

 

Source: Figures reflect data from the U.S. Census of Retail Trade issued every 5 years – 2002, 2007, and 2012.  Figures for 2014 have been estimated by Impact Consulting Services’ furniture industry model.

 

Series Factoid #2: Distribution Channels: Percent of Total Years 2002, 2007, 2014


 

This is the second factoid in a series detailing the Furniture Industry’s Distribution Channels.  Factoid #2 explores the changes of the percent of total distribution by each channel during years 2002, 2007, and 2014.

 

Furniture and Home Furnishing Stores: Still the primary source of Furniture sales, this traditional distribution channel has decreased it’s percent of total by a total of 8.1% from 2002 to 2014 – down to 64.5% in 2014 from 72.6% in 2002. 

 

Electronic Shopping: While Furniture and Home Furnishing Stores decrease their hold on the Furniture Industry, Electronic Shopping is steadily gaining traction as a major distribution channel.  Jumping from 2.8% in 2002 to 7.3% in 2007, Electronic Shopping finished out 2014 with 17.8% of the total distribution.

 

Warehouse Clubs and Supercenters: This channel increased it’s share of total distribution slightly from 2002 to 2014 – up from 3.6% to 4.0%. 

 

General Merchandise Stores: After slightly increasing by 0.3% from 2002 to 2007, General Merchandise Stores grew by 1.1%  in 2014 – accounting for 3.4% of total distribution.

 

Discount Department Stores:  Dropping it’s percent of total by (-1.5)% from 2002 to 2007, this channel rebounded slightly with an increase of 0.2% in 2014 – decreasing 3.8% to 2.5% over the 12 year span. 

 

Home Center and Other Building Materials:  This channel decreased from 3.1% of total distribution in 2002 to 2.3% in 2007 and a minimal rise to 2.4% in 2014.

 

Department Stores:  Decreasing by (-0.7)% from 2002 to 2007 and (-0.6)% from 2007 to 2014, Department stores was 1.8% of distribution in 2014. 

 

All Other Retailers:  In 2014, the remaining retailers dropped to 3.7% of distribution, after a decline from 8.9% in 2002 to 7.9% in 2007.

 

Source: Figures reflect data from the U.S. Census of Retail Trade issued every 5 years – 2002, 2007, and 2012.  Figures for 2014 have been estimated by Impact Consulting Services’ furniture industry model. 

Distribution Channels: Furniture Retail Sales Years 2002, 2007, and 2014


 

Where is Furniture being sold and who sells what type of product?  This is the first factoid in a series detailing the Furniture Industry’s Distribution Channels.  Factoid #1 shows Furniture Retail Sales by Distribution Channel in selected years – 2002, 2007, and 2014.

 

Furniture and Home Furnishing Stores are at the heart of Furniture Distribution – accounting for over 2/3 of the industry.  This channel includes traditional furniture stores along with specialty furniture retailers, mattress stores, and other retail outlets where furniture is the primary source of sales.  Of course many different business models drive this category, including manufacturing and retail verticals, national and regional and national chains, and Mom and Pop dealers. This main channel reflects the ups and downs of the economy from 2002 to 2014.  From 2002 to 2007, Furniture and Home Furnishing Stores rose 13.6% in sales before falling (-10.6)% - an overall increase of 1.5% in 2014.

 

The most noteworthy changes occur in Electronic Shopping as the online distribution of Furniture has made great strides despite the Recession years.  Over the course of twelve years, Electronic Shopping has jumped 627.2%  - increasing 201.3% the first 5 years and 141.3% the latter 7 years.  Furniture Retail Sales grew from 1.8 Billion in 2002 to 13.0 Billion in 2014.

 

Both General Merchandise Stores and Warehouse Club and Supercenters grew in distribution from 2002 to 2014.  General Merchandise Stores increased by 27.3% from 2002 to 2007 and 47.5% from 2007 to 2014 – with at total growth of 87.8%.  While Warehouse Club and Supercenters had just a slight increase of 2.9% from 2007 to 2014, they had an overall jump of 24.3% over 12 years.

 

All other distribution channels showed substantial declines over the 12 year span.  With the exception of Discount Department Stores showing growth of 8.8% from 2007 to 2014 after a drop in the first five years,  the remaining channels decreased both time increments. 

 

Source: Figures reflect data from the U.S. Census of Retail Trade issued every 5 years – 2002, 2007, and 2012.  Figures for 2014 have been estimated by Impact Consulting Services” furniture industry model. 

Industry Sales by Quarter 2008 Q1 to 2015 Q1 Bedding Industry


 

In the first quarter of 2015, Bedding Sales increased 16.3% from 2014Q4 and 10.2% compared to sales in the same quarter last year.  Year-to-date sales at $3.5 billion are up from $3.2 billion over the 2014Q1.

 

The chart above shows quarter-to-quarter Bedding industry performance from 2011Q3 through the first quarter of 2015.   For the last eight quarters bedding has shown steady and increasing improvement over the same quarter of the previous year.  In the first quarter of this year sales totaled $3.5 billion, up 10.2% over Q1 of 2014.

 

Note: Previously issued 2014 Q4 estimates have been revised.

 

 

 

 

 


Industry Sales by Quarter 2008 Q1 to 2015 Q1 Furniture & Bedding

The Industry continued its steady growth in the first quarter of this year.  A 7.7% increase over the same quarter last year resulted in Furniture and Bedding sales totaling $22.7 billion.  Compared to the previous 4th quarter of 2014, sales were up slightly 0.75%.

 

Furniture (excluding Bedding) increased 7.2% over 2014 Q4, but was down 1.68%  over quarter 4 of last year.  After a typical 4th quarter slump last year, Bedding grew 10.2% compared to Q1 of last year and 16.3% over Q4 of 2014.

 

The chart above shows quarter to quarter industry performance from 2012 Q1 through the first quarter of 2015.

 

First quarter combined Furniture and Bedding industry sales of $22.7 billion were a 7.7% improvement over $21.1 billion from the same quarter in 2014. Compared to last quarter (2014 Q4) sales improved 0.75%/

 

Furniture (excluding Bedding) increased 7.2% with sales of $19.2 Billion in 2015 Q1 – up from $17.9 Billion in 2014 Q1.

 

Bedding had an impressive quarter with sales of $3.48 billion, up 10.2% over first quarter sales last year of $3.15 billion.

 

Series Factoid #3: The 2020 Consumer: Estimated Furniture Industry Sales Based Solely on Household Formations and Current Consumer Spending Years 2015, 2020 and 2025

This is a third in a series detailing how the projected shifts in population will determine which age segments will have the highest numbers and who the Furniture industry should look to as it’s target customers.

The growth of the 25 to 44 year olds coupled with the decline of ages 45 to 54 (as shown in Factoids #1 and #2 of this series) should still result in moderate growth as the Millennials start to spend. This is based solely on demographic trends --projected population growth (Department of Commerce, Census Bureau), current headship rates, and most recent average consumer expenditures by age group (Consumer Expenditure Survey).

Demographic trends alone should grow the industry by $7.7 billion dollars over the next 10 years to $97 billion. Because of their sheer numbers, in ten years the over 65 Baby Boomers will still spend $17.8 billion and have the highest volume increase of $3.1 billion. The 35 to 44 year olds, although smaller in number, will spend $21.7 billion with the highest average per household and grow by more than $2.5 billion in industry sales.

Couple these demographically driven increases with the Department of Labor’s projected increases in consumer spending over the next ten years and the outlook significantly improves. In addition, increased housing demand by the Millennials will also fuel the furniture industry.

*Estimates are based on current demographically driven trends projected by the Census Bureau and do not reflect any changes in economic conditions. The Bureau of Labor Statistics is projecting increases in consumer spending over the next ten years that would significantly improve this outlook.

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