March 17,
2019 by Laurie Northington in General 
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
March 8,
2019 by Laurie Northington in General
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.
March 8,
2019 by Laurie Northington in bedding
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
March 1,
2019 by Laurie Northington in General
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
February 22,
2019 by Laurie Northington in General
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.
February 15,
2019 by Laurie Northington in General
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
February 8,
2019 by Laurie Northington in General
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.
Among the largest metro areas (over 1.5 million housing units), Houston leads the way with 21 percent growth last year. Boston and Atlanta both have over 15 percent growth, while Phoenix and Los Angeles have over 10 percent. By far, Chicago and Detroit are experiencing the worst negative growth in residential building – down 23.8 and 23.9 percent from 2017 Q2 to 2018 Q2.
Some smaller MSAs made the list of metro areas with the largest unit growth in residential building permits with Houston, TX topping the list at 5,032, followed by Orlando, FL with 4,319. Certainly Hurricane Harvey last year is contributing to some of Houston’s housing permit growth. Charlotte, N.C. is third on the list with 3,788 permits. Phoenix, AZ, Austin, TX, and Salt Lake City, UT are also smaller cities that are showing growth in residential building.
Source: Census Bureau Housing Units and Building Permits
February 1,
2019 by Laurie Northington in General
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 third 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. Furniture retailers should pay close attention to the markets where building is picking up and where building is slowing. Overall building permits grew 6.6 percent in the U.S. 2017 Q2 to 2018 Q2 annualized. Interestingly, it is the smaller markets where building permits have increase, specifically for single-family units. The larger MSAs, 500,000 to 1.5 Million and Over 1.5 million housing units, had the smallest growth over last year, 4.8 percent and 5.8 percent respectively. Mid-size range 250,000 to 500,000 increased the most at 9.4 percent, while the smallest range available (50,000 to 100,000) had the second highest growth at 9.3 percent. of 4.6.
Looking at state increases in building permits in 2018, Hawaii had the highest growth in residential building permits since the second quarter of 2017 -- jumping 32.6 percent followed closely by New Hampshire at 30.9 percent. Idaho, Utah, and North Carolina all had over a 20 percent increase.
Building permits declined in many states. Montana had the lowest growth in residential building permits declining 23.7 percent this year compared to 2017, followed by Mississippi, down 20.5 percent, and Illinois falling 15.7 percent.
Source: U.S. Census Bureau Building Permits, unadjusted
Note: Data includes all states
January 25,
2019 by Laurie Northington in General
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 second 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 housing inventory has fluctuated among the states with the highest ratio of homes for sale, no state has maintained above a ratio of 2.0 homes for sale per 100 households through June of this year. At the highest, Vermont has 1.6 homes for sale per 100 households – down from 2.4 in 2015.
Big cities have been hit hard by the housing shortage. The top three largest markets with the tightest homes for sale inventories are located in the West -- San Francisco, Seattle, and Los Angeles. And by far, the Seattle area has been hit the hardest – inventory plummeting 76.7 percent down to a ratio of 0.34 homes for sale per 100 households in the past seven years. Metro areas with high inventories in 2011 – Atlanta and Miami – have fallen 62.9 percent and 44.5 percent, but both markets are still in better shape than other major cities.
Source: Zillow Inventory Data; Census Bureau Housing Units
Note: 2018 housing unites have been estimated *Data is unavailable for Nevada and Indiana
January 11,
2019 by Laurie Northington in General
This year the youngest Millennials have officially become adults with the largest generation since the Baby Boomers spanning ages 18 to 36. Most researchers and studies concur the last 10 years had dealt most Millennials an increasingly difficult economic hand.
This is the final factoid in a series of three factoids that breaks the Millennial generation into three distinct segments based on proximity to the Great Recession and date of college graduation or job market entry – prior to the recession, during the recession and post-recession high unemployment period, and post-recession recovery.
Being such a large generation Millennials are starting to make their imprint on the workforce. Employed Millennial workers ages 25 to 34 are growing in number and now surpass the number of employed 35 to 44 Gen Xers. At 34.4 million post-college employed workers in 2017, Millennials are now 7.8 percent higher than Generation X in the amount of people in the workforce. Although Millennials now have the most employees in the workforce, they still lead the way with higher unemployment rates. 4.6 million 25 to 34 year-olds are unemployed compared to 3.5 million 35 to 44 year-olds and 3.2 million 45 to 54 year-olds.
While each category felt the effects of the Great Recession on the unemployment rate, those with a bachelor’s degree or higher spiked up to 4.9 percent in January of 2010 before leveling out to 2.5 percent in 2017 – just 0.4 percentage points shy of the rate in January 2007.
The percent of Millennials 25 to 34 who are “not in the labor force”, mostly students and others who are neither working nor seeking work past college age, is in line with Generation X . At 21.8 percent, the older Millennials not in the labor force are only slightly higher then the 20.9 percent designated to 35 to 44 year-olds (younger Gen Xers). However, keep in mind that many more Gen Xers are couples where one has chosen to stay at home to care for children while the other is employed.
Source: Bureau of Labor Statistics, U.S. Department of Labor, Current Population Survey