Prime Furniture Purchasing Age Groups: Growth in Furniture Buying Population (Households) by Age Segment: 2000 to 2013
This is the first in a series of Factoids that graphically detail the shifts in the populations and purchasing habits of the four prime furniture purchasing age groups in the Furniture Industry. By 2007 as the Recession was hitting stride, the two older age groups (ages 45 to 54 and ages 55 to 64) surpassed the younger generations in size. Combined, these predominately Baby Boomers now consist of over 50% of the furniture buying population.
Households ages 35 to 44, which dominated the furniture industry’s record growth of the late 1990s and early 2000s, are in sharp decline. In 2004, this prime family age group fell to become the 2nd largest age segment and in 2011 fell again to 3rd place.
FACTOID SERIES: PRIME FURNITURE PURCHASING AGE GROUPS
The Baby Boomers (born during the 20 year period 1945 to 1964) now include all persons ages 49 to 68. This historical segment drove the record growth of the furniture industry in the 1990s through the early 2000s.
Traditionally, furniture industry purchasers (households) have been divided into four age groups: 25 to 34 years, 35 to 44, 45 to 54, and 55 to 64. As the largest block of U.S. households, the Baby Boomers (currently ages 49 to 68) have begun their exit out of their prime furniture purchasing years. As they grow older, the industry faces challenges, especially in the next 5 to 10 years, as household formations have slowed to very low growth.
The next generation to give the furniture industry the bump it needs is known as Generation Y. They are a product of the second highest birth rate in U.S. history and are currently between the ages of approximately 9 and 28. The furniture industry anxiously awaits this generation’s full arrival. In 10 years the youngest of the Baby Boomers will be nearing 60 years of age and the youngest of the Generation Y group will be almost 20.
Over the next several issues, HFB will present “Factoids” detailing relevant data on the age segments of the U.S. households and their impact on the furniture industry. The first Factoid details the historical growth of households within the age segments and graphically depicts the aging of the Boomers.
• Ages 25 to 34: The youngest age group has showed little growth since 2000 growing only 7.5% and representing 23% the furniture buying population. But that is about to change as the leading edge of the group with the second highest birth rate in U.S. history, Generation Y, starts making its way into the furniture buying population.
• Ages 35 to 44: In the late 1990s and early 2000s, the 35 to 44 age group dominated the furniture industry spurring record growth in all product categories. At its peak, this group totaled 23.2 million households, but has fallen from 30% of the furniture buying population in 2000 to 24% in 2012. This segment, traditionally the bread and butter of the furniture industry, is in sharp decline as the low birth rate generation known as the Baby Bust (those born in the early 1960s through the early 1980s) moves through this age segment’s ranks.
• Ages 45 to 54: In the mid-2000s, the glut of the Baby Boomers was in the age group 45 to 54. By 2004 this age group surpassed the younger group to become the largest household segment. Now in their prime earning years, they total 24.1 million households. The middle of this segment (age 49) is currently the last edge of the Baby Boomers. This 45 to 54 age segment peaked three years ago and began its gradual decline.
• Ages 55 to 64: Since 2000, the Baby Boomers have poured into the 55 to 64 age group. The rise in households has been rapid, growing 68% since the start of the millennium. In 2011 this group became the 2nd largest age segment. Currently it totals 24.1 million households and has grown from 18% of the furniture buying population in 2000 to 25%.
Our Factoid Series on the Prime Furniture Purchasing Age Groups will continue over several weeks.
Industry Sales by Quarter (2008 Q1 – 2013 Q3)
Industry sales continued to creep up slowly to $19.2 Billion, the highest level since the industry’s one-quarter historical peak in 2007 Q3 at $19.9 billion. Combined Furniture and Bedding grew 1.9% over the same 3rd quarter of last year and 6.1% over the previous quarter 2. Furniture (excluding Bedding) increased 1.9% over 2012Q3 and 5.2% over Q2 of this year. Bedding showed better improvement at 6.3% quarter to quarter (2012 Q3 to 2013 Q3) and 11.5% growth compared to the 2013 Q2. Year-to-date, Furniture sales are flat and Bedding up 2.48%.
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Industry Sales by Quarter (2007 Q3 – 2013 Q2)
The Industry experienced its typical 2nd quarter dip with overall Furniture and Bedding sales totaling $17.84 billion, down a half of a percent (-0.5%) over the 2nd quarter of last year. Furniture (excluding Bedding) had a disappointing first half of the year with 1st quarter sales down 2.8% followed by another 1.4% decline in quarter 2. For the Bedding Industry, after declining 1st quarter sales of -3.2% (Q1 to Q1), quarter 2 sales increased 4.8% over the same quarter of last year.
Industry Sales by Quarter (2007 Q3 – 2013 Q1)
Retail sales in general were weaker in Q1 and February especially was a poor month for retail furniture store sales. Overall, both bedding and furniture were flat compared to the 4th quarter (down less than two tenths of one percent, but both down close to 2% over the 1st quarter of last year (furniture & bedding down 2.06% and bedding only 1.89%).
Fourth quarter industry sales increased 3.5% over the same quarter last year; however, the rate of growth slowed from earlier quarters, but was down 2.4 % over the previous quarter of 2012.
Retail Furniture and bedding sales totaled $18.3 billion in Quarter 4.
In the 2nd quarter, industry sales followed what has become its typical 2nd quarter seasonal dip. The 3rd quarter rebounded strongly growing 7.3% over the same quarter of 2011 and 6.2% over the previous 2nd quarter of this year (2012 Q2 to 2012 Q3).
Retail Furniture and Bedding sales totaled $18.3 billion in quarter 3.
In the third quarter of this year, the Furniture Industry rallied to its highest level in three years up 5.6% over the last quarter (2011Q2 to 2011Q3) and up 1.9% over the same quarter of last year (2010Q3 vs. 2011Q3).
Retail Furniture and Bedding sales totaled $16.9 Billion for the quarter.
Political turmoil, natural disasters and depressing economic news have contributed to the ongoing decline of consumer confidence and industry sales in the second quarter of 2011. While industry sales are gradually declining since the third quarter of 2010, consumer confidence has decreased more dramatically and is the lowest it has been in a decade. Those not yet feeling the burdens are benefiting from the continuing industry consolidation.
From a national perspective, the Furniture Industry declined in the 2nd quarter with sales down 1.8% over the 1st quarter of this year and was flat compared to the 2nd quarter of last year (up only 0.4%). Measured and calculated decisions will be the deciding factors for those who survive these unnerving economic times.