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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

Millennials Gain Share of Consumer Spending

As Baby Boomers continue to age out of prime furniture buying years, Generation X households have held strong in their power as key contributors to consumer spending – despite a much smaller population size. A more affluent Generation X population paired with the sheer size of Millennials, now fully in adulthood, points to a bright future for the furniture and home furnishings industry. In 2017, Millennials accounted for 71.9 million people and are expected to surpass Baby Boomers size of 73.5 million next year.

This is the first factoid in a series of four factoids, using data from the U.S. Bureau of Labor Statistics’ 2017 Consumer Expenditure Survey to show the shift over the last four years in consumer spending among the five adult generations as Millennials continue to gain a greater share.

In 2017, Baby Boomers still had the highest number of households representing 34.4 percent of consumer units, compared to 26.8 percent for Generation X, and 25.1 percent for Millennials. Although Millennials are inching closer to Generation X in consumer units, the percent of all consumer spending is still over 10 percentage points higher for Gen Xers and almost 15 points higher for Baby Boomers. After years of Baby Boomers controlling the majority of furniture and bedding spending, the market has now spread to Generation X and Millennials, who combined account for 56.9 percent.

Source: Bureau of Labor Statistics, Consumer Expenditure Survey 2017, Pew Research
(1)Demographers are still debating the last birth year of Millennials, Pew Research has recently set the year at 1996. The Census Bureau has not yet gone on record for the Millennial end year.
(2) Post Millennials will likely be split into two generations at some point

The Changing Retail Landscape: Average Sales Per Stores

The retail landscape has evolved over the last ten years and continues to shift as more brick and mortar stores shutter their doors amid a growing e-commerce industry.

This is the final factoid in a series of five factoids detailing the dramatic shifts in the furniture industry’s distribution channels, taking place in both sales and in-store counts. The U.S. became over-stored in many channels during the 1990’s and early 2000’s as developers kept building shopping centers and companies continued opening retail outlets.

The Great Recession was the initial economic event to impact the retail landscape, especially for furniture and home furnishings stores as the housing and mortgage crisis escalated. Then with the influx of internet companies like Amazon and Wayfair, consumers altered spending habits and priorities.

During the recovery period from 2012 forward, all furniture and home furnishings distribution channels grew in sales, despite store closings, with the exception of electronics and appliance stores and department stores.

The net effect, especially for furniture, is that even though industry sales slowed and stores shuttered, the ones left standing had higher sales and continued to increase their sales per store. The average annual sales per store for furniture stores climbed steadily from $1.9 million in 2009 to $2.9 million in 2018 YTD – jumping 52.6 percent. Home centers have also benefitted from the net effect, increasing their sales per store by 73.7 percent during the same time period, mostly likely as smaller stores have closed.

Source: U.S. Census Bureau, Survey of Retail Trade

The Changing Retail Landscape Retail Sales Select Furniture and Home Furnishings Retailers

The retail landscape has evolved over the last ten years and continues to shift as more brick and mortar stores shutter their doors amid a growing e-commerce industry.

This is the fourth factoid in a series of five factoids detailing the dramatic shifts in the furniture industry’s distribution channels, taking place in both sales and in-store counts. The U.S. became over-stored in many channels during the 1990’s and early 2000’s as developers kept building shopping centers and companies continued opening retail outlets.

During the recovery period from 2012 forward, all furniture and home furnishings distribution channels grew in sales, despite store closings, with the exception of electronics and appliance stores and department stores.

Retail sales from electronic shopping and mail-order houses catapulted 131.3 percent from the peak of the recession in 2009 to 2017, but furniture stores and home furnishings stores experienced a healthy growth in retail sales, increasing by 23 percent and 21 percent from 2012 to 2017.

Both furniture stores and home furnishings stores’ sales have grown a yearly average of 4 percent in the past five years. Warehouse clubs and superstores have slowed momentum of sales in the last five years, but are still growing an average of 2.6 percent each year.

Source: U.S. Census Bureau, Survey of Retail Trade
*2007 to 2012 contains five years of data surrounding the Great Recession, 2012 to 2017 reflect recovery and economic growth years

Growth and Decline of Furniture Stores Annual Growth in Establishments

The retail landscape has evolved over the last ten years and continues to shift as more brick and mortar stores shutter their doors amid a growing e-commerce industry.

This is the third factoid in a series of five factoids detailing the dramatic shifts in the furniture industry’s distribution channels, taking place in both sales and in-store counts. The U.S. became over-stored in many channels during the 1990’s and early 2000’s as developers kept building shopping centers and companies continued opening retail outlets.

This factoid tracks the percent of stores closed from two historical perspectives – (1) 2007 to 2012 during the recession and subsequent slow recovery years, and (2) 2012 to 2018 during economic recovery and high growth. During the recession and the immediate recovery years, furniture stores and home furnishings stores shuttered more locations as a percent of total than any other in the key retail furniture groups, closing stores an annual rate of 3.8 percent over those five years. Meanwhile home furnishings stores closed 3.5 percent of locations each year 2007 to 2012. But these two primary channels took their hits early due to the housing and mortgage crises as did home centers. During the last five years furniture and home furnishings stores lost less than 1 percent of its outlets annually. Meanwhile home centers closed 2.2 percent of stores annually in the five-year recessionary/recovery period and continued to lose 1.2 percent annually 2012 to 2018Q1.

Other retail channels continued to grow during the early recession and post period or had minimal store closing, but have closed stores in recent years. These include department stores and electronics and appliances retailers. The only retailers to continuing opening stores were warehouse clubs and superstores, general merchandise stores, and electronic shopping and mail-order houses (non store retailers).

Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages
*2007 to 2012 contains five years of data surrounding the Great Recession; 2012 to 2018 Q1 reflect recovery and economic growth years.

The Changing Retail Landscape: Growth and Decline of Furniture Stores


The retail landscape has evolved over the last ten years and continues to shift as more brick and mortar stores shutter their doors amid a growing e-commerce industry.

This is the second factoid in a series of five factoids detailing the dramatic shifts in the furniture industry’s distribution channels, taking place in both sales and in-store counts. The U.S. became over-stored in many channels during the 1990’s and early 2000’s as developers kept building shopping centers and companies continued opening retail outlets.

The number of furniture stores peaked in 2007 at 27,630, according to the U.S. Bureau of Labor Statistics. Since that time brick and mortar furniture stores fell to 22,052 store fronts this year. This 20.2 percent total decline or annual CAGR of 2 percent loss represents the largest decrease of all the key channels 2007 to 2018 Q1. The announced closing of 700 Mattress Firm stores will result in another 3 percent decline. Home furnishings stores did not fare much better, falling 19.4 percent in number over the 10 plus years, but showed a slight uptick in the first quarter of this year of 0.3 percent.

During the same time period 2007 to 2018 Q1 pure electronic shopping and mail order houses surged by 100.9 percent or 6.5 percent annual growth.

Warehouse stores and supercenters (i.e. Costco, Wal-Mart, and Target) peaked in number two years ago in 2016 at 6,073 locations and have gradually closed 1.1 percent of the stores over the last 15 months. Department stores (i.e. Macy’s, Bloomingdale’s, Kohl’s, TJ Maxx) as a group also showed strong signs of post-recession recovery, increasing the number of stores by 22.5 percent (2007 to 2015) before a catastrophic closing of 14.5 percent of stores in just over two years. Electronics and appliances stores, the largest distribution channel in number, along with home centers (i.e. Home Depot, Lowes’s) continued to remove stores throughout the recession and after, maintaining an average annual decline of 1 percent and 2 percent, respectively. At one time the electronics and appliances stores totaled 53,343 but now number 45,351 in 2018 Q1.

Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages

Growth and Decline in Number of Retail Stores Key Furniture and Home Furnishings Distribution Channels 2007 to 2017

The retail landscape has evolved over the last ten years and continues to shift as more brick and mortar stores shutter their doors amid a growing e-commerce industry.

This is the first factoid in a series of five factoids detailing the dramatic shifts in the furniture industry’s distribution channels, taking place in both sales and in-store counts. The U.S. became over-stored in many channels during the 1990’s and early 2000’s as developers kept building shopping centers and companies continued opening retail outlets.

The Great Recession was the initial economic event to impact the retail landscape, especially for furniture and home furnishings stores as the housing and mortgage crisis escalated. Then with the influx of internet companies like Amazon and Wayfair, consumers altered spending habits and priorities.


Some retail channels have fared well during the last 10 plus years, but many have not. Many channels peaked in total establishments (store fronts) just before the recession and some continued to grow. Except for electronic shopping and mail-order stores and general merchandise (variety) stores, virtually all other retailers of furniture and home furnishings continue to close stores. Furniture, electronics and appliance stores, and home centers peaked in 2007 and continue to decline. Home furnishings stores have been on a similar path, but did increase in number slightly in 2017. Department stores and warehouse clubs and superstores grew during and after the recession, but have been victimized from the pressure of internet companies and have decreased in number in the last couple of years.

Industry Sales by Quarter 2011 Q4 to 2018 Q4 Bedding Industry

In 2018 the Bedding industry continued struggle amidst consolidation and an increased internet presence. Initial fourth quarter estimates of $3.60 billion put 2018 Q4 sales up 2 percent over 2017 Q4. Compared to the previous third quarter of 2018, sales are down 12.9 percent reflecting Bedding’s seasonality. Preliminary year end sales total $15.51 billion up 2.6 percent over 2017.

Last year Bedding’s quarterly to quarter growth over the previous year continued to be modest. The fourth quarter remains Bedding’s historically lowest volume quarter, totaling $3.6 billion 2018 Q4, up 2 percent from 2017.

Year end Bedding sales are still under review, but preliminary results show 2018 sales of $15.51 billion, a 2.6 percent increase over 2017.

Source: Impact Consulting Services, Inc.’s FurnitureCore.com industry model
Note: 2010 to 2018 data revised based on revisions by the U.S. Department of Commerce, Bureau of Economic Analysis’ Personal Consumption Expenditures survey

Industry Sales by Quarter 2011 Q4 to 2018 Q4

In 2018 the Bedding industry continued to struggle amidst consolidation and an increased internet presence. Initial fourth quarter estimates of $3.60 billion put 2018 Q4 sales up 2 percent over 2017 Q4. Compared to the previous third quarter of 2018, sales are down 12.9 percent reflecting Bedding’s seasonality. Preliminary year end sales total $15.51 billion up 2.6 percent over 2017.

Last year Bedding’s quarterly to quarter growth over the previous year continued to be modest. The fourth quarter remains Bedding’s historically lowest volume quarter, totaling $3.6 billion 2018 Q4, up 2 percent from 2017.

Year end Bedding sales are still under review, but preliminary results show 2018 sales of $15.51 billion, a 2.6 percent increase over 2017.

Source: Impact Consulting Services, Inc.’s FurnitureCore.com industry model
Note: 2010 to 2018 data revised based on revisions by the U.S. Department of Commerce, Bureau of Economic Analysis’ Personal Consumption Expenditures survey

Industry Sales by Quarter 2011 Q4 to 2018Q4 Furniture & Bedding

Note: The U.S. Department of Commerce, Bureau of Economic Analysis, revised its estimates of Personal Consumption Expenditures (PCE) in all consumer product areas, including furniture and bedding. This historical revision is customary prior to each 10-year U.S. Census. The PCE estimates are tied to the GDP and these changes are important. Revised back to 2010, the net impact is an average 8 percent cumulative reduction in furniture and bedding expenditures. Impact Consult

The combined Furniture and Bedding industry reached 26.97 billion in the fourth quarter, up 4.8 percent over the same quarter last year, but down 0.9 percent over the third quarter of 2018. Despite the slower fourth quarter growth, the total industry finished the year 6.8 percent higher than 2017.

Furniture (excluding Bedding) in the fourth quarter increased 5.2 percent versus the same quarter in 2017 totaling $23.36 billion. Compared to the third quarter of 2018, sales we up by only 1.2 percent. Year end furniture sales excluding bedding reached $90.82 billion, up 7.6 percent over 2017.

The Bedding industry’s historical growth in the fourth quarter is generally down double digits compared to the third quarter. The industry continued this trend with sales down 12.9 percent compared to Q3. Initial estimates of $3.6 billion put 2018 Q4 sales up 2 percent over 2017 Q4. Preliminary estimates of year end sales total $15.51 billion up 2.6 percent over 2017.

The second and third quarters of 2018 saw growth in combined furniture and bedding sales exceed 8 percent compared to 2017. In the fourth quarter, however, performance slowed in both product categories to 4.8 percent growth over the same quarter of last year. Compared to the previous third quarter, sales fell slightly by 0.9 percent.

Year end industry sales in 2018 totaled $106.33 billion, an increase of 6.8 percent over 2017. Furniture, excluding bedding, grew a healthy 7.6 percent to $90.82 billion and Bedding increased 2.6 percent to $15.51 billion.

Source: Impact Consulting Services, Inc.’s FurnitureCore.com industry model
Note: 2010 to 2018 data updated based on revisions by the U.S. Department of Commerce, Bureau of Economic Analysis, Personal Consumption Expenditures survey.

Low Housing Inventories and Markets Most Affected: Metro Areas (MSAs) with Largest Unit Growth in Residential

In many metropolitan areas, critically low inventories and subsequent skyrocketing home prices and rental rates are locking out new home buyers and impeding moves at a time when the economy is growing and employment is high. This is the fourth factoid in a series of five factoids that zeros in on markets hit the hardest with the housing shortage and those that are fairing better.

While many metro areas are suffering with tightening housing inventories, some areas are having better luck with building permits and new housing construction in an attempt to turn the tide.

Single Family Homes

For single family units only, Phoenix leads the way with 1,509 building permits added from 2017 Q2 to 2018 Q2, followed by Santa Rosa, CA with 1,007. Denver, Charlotte, and Atlanta all had above an 800 unit growth over the same time period.

Multi-Family Homes

From the 2nd quarter of 2017 to the 2nd quarter of 2018, Houston tops off the list for MSAs with the largest growth of multi-family units at 4,525, followed by Orlando with 3,767 and Charlotte with 2,892. Los Angeles, Atlanta, and San Diego all exceeded 1,500 units over the same year.

Source: Census Bureau Housing Units and Building Permits

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