FurnitureCore
Search Twitter Facebook Digital HFBusiness Magazine Pinterest Google
Advertisement
Ad_Subscribe_HFB

Get the latest industry scoop

Subscribe

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.

View Factoid Library

 

rss

Factoids

Charting the Progress of Survival: Percent of Total Stores and Employee Size

In what’s considered by many as the ‘Retail Apocalypse,’ retail store closings in 2019 are on pace to exceed closings in 2018. According to a report from investment banking firm UBS, an estimated 75,000 stores that sell clothing, electronics and furniture will close by 2026.

This is the fourth factoid in a series of five factoids that studies a March 2019 report from the U.S. Census Bureau’s Statistics of U.S. Business, shining the light on challenges furniture and home furnishings stores have faced over the last 10+ years and continue to face going forward.

Small stores with under 10 employees make up the greatest share of total furniture stores in the U.S., roughly 44% in 2016. That share has diminished since 2006 – falling 5.7 percentage points from 49.7%. The largest furniture stores with the highest number of employees (500 +) grew their share of furniture stores from 18.1%  to 27.4% in nine years – a jump of 9.3 percentage points. Overall, furniture stores with less than 100 employees all lost share to larger furniture stores. 

The majority of furniture store employees (53.4%) worked in stores with more than 100 employees in 2016 and 41.3% of those were employed in furniture stores with 500+ employees. The largest stores were the only employee range to gain a greater percentage – increasing by 9.5% from 2007 to 2016.

The shifts in store percentage and employee size were not as great for home furnishings stores. While home furnishings stores with 500+ employees did increase as a percent of total stores by 1.9%, stores with under 10 employees remained just under 60% of total home furnishings stores. Home furnishings stores with the most employees were also the only employee range to gain in size – increasing 4.2 percentage points to 55.7% in 2016.

Source: U.S. Census Bureau, Statistics of U.S. Businesses, Business Information Tracking Series

Industry Sales by Quarter 2012 Q4 to 2019 Q4 Bedding Industry

The Bedding industry’s instability continued throughout 2019, posting little improvement. Fourth quarter sales estimates of $3.81 billion represented a 2.4% increase over the same Q4 of 2018, but was 9.5% lower than the previous 2019 Q3. This decline is consistent with Bedding’s typical Q4 seasonality dip. International tariff wars appeared to be easing at year-end with 2019 sales totaling an estimated $15.89 billion – down 1.9% compared to 2018.

Bedding’s difficulties stand out when comparing 2019 quarter-over-quarter growth to 2018. Only 2019 Q4 showed a slight 2.4% increase, but that was compared to an underperforming 2018 Q4.

Preliminary estimates of 2019 Bedding sales total $15.89 billion – down 1.9% versus 2018 – and showing the first negative growth since the Great Recession.

Source:  Impact Consulting Services, Inc. industry model  Note: Previous 2019 quarters have been slightly revised

 

Industry Sales by Quarter 2012 Q4 to 2019 Q4 Furniture & Bedding

Riding the tailwind of strong industry sales in the 3rd quarter, 4th quarter 2019 finished flat compared to Q3 (down 0.2%), but up 7.2% compared to the disappointing 4th quarter of 2018. Furniture sales, excluding Bedding, were up 1.2% 2019 Q3 to 2019 Q4 and up 7.9% versus the previous year, 2018 Q4. Year-end sales of $118.55 billion represent an increase of 5.1% over 2018, the smallest growth since 2013.

Furniture sales (excluding Bedding) grew 6.3% year-end 2019 over 2018. The fourth quarter posted 7.9% growth over the same Q4 last year, but only 1.2% higher than the previous 2019 Q3.

Bedding’s tumultuous last two years, with store closures and import woes, have resulted in slow and negative growth. Year-end sales of $15.89 were 1.9% below 2018 – the first negative growth since the Great Recession. In the 4th quarter of 2019, Bedding continued its seasonal pattern of 4th quarter slumps, down 9.5% compared to 2019 Q3. But sales were up 2.4% over the previous year (2018 Q4 to 2019 Q4).

2019 began the year with weak industry sales and economists’ predictions of a possible late-year recession that never came. Year-over-year quarterly growth kept increasing, despite months of uncertain tariff wars, with Q4 of 2019 improving 7.2% compared to the same Q4 of 2018.

Furniture, excluding Bedding, was up 7.9% Q4 2018 to Q4 2019 and Bedding up 2.4%.

Industry sales finished 2019 at $118.55 billion, an increase of 5.1% over 2018. This represents a slowing compared to 2018 growth of 7.0%. Furniture sales, excluding Bedding, totaled $102.65 billion – up 6.3% over 2018, while Bedding sales totaled $15.89 billion – a decline of 1.9% for the year.

Source:  Impact Consulting Services, Inc. Furniturecore.com industry model Note: Previous 2019 quarter sales have been revised slightly

Furniture and Home Furnishings Stores Openings and Closings

In what’s considered by many as the ‘Retail Apocalypse,’ retail store closings in 2019 are on pace to exceed closings in 2018. According to a report from investment banking firm UBS, an estimated 75,000 stores that sell clothing, electronics and furniture will close by 2026.

This is the third factoid in a series of five factoids that studies a March 2019 report from the U.S. Census Bureau’s Statistics of U.S. Business, shining the light on challenges furniture and home furnishings stores have faced over the last 10+ years and continue to face going forward.

Although hit hard by the Great Recession, furniture and home furnishings stores had a surge in new store openings from 2011 to 2012. New furniture store openings jumped by 64.6%, while new home furnishings store openings increased by 20.9%. Unfortunately, 2012 saw the highest number of new furniture and home furnishings store closings. Furniture store closings skyrocketed 75.6%, while home furnishings store closing increased by 33.8%.

Source: U.S. Census Bureau, Statistics of U.S. Businesses, Business Information Tracking Series

Charting the Progress of Survival, Furniture and Home Furnishings Stores

In what’s considered by many as the ‘Retail Apocalypse,’ retail store closings in 2019 are on pace to exceed closings in 2018. According to a report from investment banking firm UBS, an estimated 75,000 stores that sell clothing, electronics and furniture will close by 2026. This is the second factoid in a series of five factoids that studies a March 2019 report from the U.S. Census Bureau’s Statistics of U.S. Business, shining the light on challenges furniture and home furnishings stores have faced over the last 10+ years and continue to face going forward.

The heaviest decline in both furniture and home furnishings stores occurred between 2007 and 2012. Furniture store locations dropped 18.8% during that period from 27,386 stores to 22,201. Meanwhile home furnishings stores fell 22.5% from 33,787 stores in 2007 to 26,184 in 2012. Furniture stores declined another 0.9% from 2012 to 2016, while home furnishings stores lost 5.3% more stores. Overall, from 2007 to 2016, the number of furniture store locations decreased by 19.6% and 26.5% for home furnishings stores.

Partnered with store closings is loss of store employees. For both furniture and home furnishings stores, the largest decline in the number of employees occurred in 2009 – a drop of 13.1% and 17.9%, respectively. Decreasing the number of employees steadily from 2007 to 2012, employees in furniture stores diminished by 28.4%, while home furnishings stores cut employees by 29.8%. Both furniture and home furnishings stores had employee growth from 2012 to 2016 as furniture stores increased employees by 7.9% and home furnishings stores by 5.7%. And though employment continues to slowly increase, it is still well below 2007 levels – 20% less for furniture stores and almost 24% less for home furnishings stores.

Source: U.S. Census Bureau, Statistics of U.S. Businesses, Business Information Tracking Series *Estimated based on Department of Labor, Bureau of Labor Statistics growth estimates

Charting the Progress of Survival: Furniture and Home Furnishings Stores - Ratio of Store Openings and Closings as a Percent of Total Stores at Start of the Year*

In what’s considered by many as the ‘Retail Apocalypse,’ retail store closings in 2019 are on pace to exceed closings in 2018. According to a report from investment banking firm UBS, an estimated 75,000 stores that sell clothing, electronics and furniture will close by 2026. This is the first factoid in a series of five factoids that studies a March 2019 report from the U.S. Census Bureau’s Statistics of U.S. Business, shining the light on challenges furniture and home furnishings stores have faced over the last 10+ years and continue to face going forward.

The disparity between furniture store openings and closings was the highest from 2007 to 2012. The ratio of furniture store closings as a percent of total stores averaged 11% in the five years during and immediately following the recession. Despite a boom of store openings from 2011 to 2012, the ratio of furniture store openings averaged only 8.3% in the same five years. From 2012 to 2016, the net change in stores has stayed relatively flat – never showing a positive net change for furniture store openings.

The disparity between store openings and closings has reached even wider for home furnishings stores – closing an average of 11.6% of stores per year from 2007 to 2012 and only opening a yearly average of 6.5%. Since 2012, the number of store closings have exceeded openings with the net change a negative 1.4%.

Source: U.S. Census Bureau, Statistics of U.S. Businesses, Business Information Tracking Series *March 2019 Report – Data collection ends in 2016

Housing Starts Not Keeping Up with Demand Residential Construction Workers Annual Growth

Although the U.S. now has a healthy economy, incomes are on the rise, and growth in household formations has finally started to normalize, the housing industry cannot keep up.

This is the final factoid in a series of five factoids detailing slow-to-grow housing starts, low inventories, and rising mortgages and rents.

The rebound of residential construction continues to be slow well past the recession recovery.

Labor shortages and the rising cost of land and materials has led to housing being built primarily for the higher end of the market. At a time when Millennials are fully entering their home buying years, many are being locked out – not boding well for the furniture industry.

Numerous factors have converged to create the housing shortage, one of which is lack of construction labor. The number of residential construction workers fell 21.7% in 2009 and did not begin showing positive growth (2.8 %) until 2012. While growth in construction labor has not been robust, there has been consistent increases each year since 2012 – growing an average of 5% each year from 2012 to 2019 May YTD. 

Source: U.S. Bureau of Labor Statistics *Seasonally adjusted at annual rates

Housing Starts Not Keeping Up with Demand

Although the U.S. now has a healthy economy, incomes are on the rise, and growth in household formations has finally started to normalize, the housing industry cannot keep up.

This is the fourth factoid in a series of five factoids detailing slow-to-grow housing starts, low inventories, and rising mortgages and rents.

Labor shortages and the rising cost of land and materials has led to housing being built primarily for the higher end of the market. At a time when Millennials are fully entering their home buying years, many are being locked out – not boding well for the furniture industry.

While higher interest rates and rising home prices have led to a slightly increased housing inventory in recent years, inventory levels remain historically low. In this tight housing market, affordability continues to be a challenge for both renters and first-time buyers.

Low home inventories have brought correspondingly low vacancy rates. The vacancy rate among homeowners has dropped each year since 2010 to 1.4 percent this year. Meanwhile,  rental vacancies have hovered around 7 percent for the last four years.

Source: U.S. Census Bureau, Current Population Survey and Housing/ Vacancy Survey

Housing Starts Not Keeping Up with Demand Single-Family Units vs. Multi-Family Units

Although the U.S. now has a healthy economy, incomes are on the rise, and growth in household formations has finally started to normalize, the housing industry cannot keep up.

This is the third factoid in a series of five factoids detailing slow-to-grow housing starts, low inventories, and rising mortgages and rents.

Single-Family Units vs. Multi-Family Units

Between 2010 and 2015, a shift occurred in housing starts between single-family and multi-family units. In 2010, the vast majority of housing starts (80.3%) were single family, while that number shifted to 64.3% in 2015. In 2015, multi-family units represented over a third of all housing starts signaling a growth in more affordable housing. Since that time, however, multi-family starts have fallen under 30% of total housing starts.

Regionally the ratio of single family to multi-family housing starts is strikingly different in the Northeast where multi-family housing starts represent 43.8% of all starts this year through May year-to-date. The Midwest has the lowest multi-family ratio at 25.6%.

Probably more worrisome than negative housing starts this year is the larger decline of building permits. With the exception of multi-family units up 2.9%, total building permits are down 2.4% and single-family units dropped 5.3% from 2018 to 2019 YTD.

Source: U.S. Census Bureau, U.S. Department of Housing and Urban Development

Housing Starts Not Keeping Up with Demand Percent Growth of Housing Starts

Although the U.S. now has a healthy economy, incomes are on the rise, and growth in household formations has finally started to normalize, the housing industry cannot keep up.

This is the second factoid in a series of five factoids detailing slow-to-grow housing starts, low inventories, and rising mortgages and rents.

Fewer homes are being built per household than at any time in U.S. history. According to Joint Center for Housing Studies estimates, annual construction should now be on the order of 1.5 million units, or about 260,000 higher than in 2018.

Instead, total housing starts this year are still 31 percent below pre-Great Recession levels – 1,238,000 in 2019 May (seasonally adjusted at annual rate) versus 2006 starts of 1,801,000.

After digging out of the hole left by the recession, housing starts had a 28.2 percent jump in 2012 and 18.5 percent growth in 2013, but the large increases have stalled in recent years before hitting negative growth in the first quarter of 2019. 

Housing growth regionally presents a more troubling picture for some areas. The South has the healthiest growth in housing starts, up 6.5 percent this year with all other regions posting negative growth in both single and multi-family unit starts. It should be noted that the South also has the largest increases in household formations contributing to this growth. The Midwest has the largest drop in housing starts this year – down 11.2 percent. Multi-family family unit starts are up 14.3 percent in the South, while the Midwest posts a negative growth of 20.3 percent.

Source: U.S. Census Bureau, U.S. Dept. of Housing and Urban Development, Current Population/Housing/Vacancy Survey * Seasonally adjusted

HFB Designer Weekly
CoreVid
[Ad_HFB_APP_Store]
HFB Designer Weekly
HFB Pinterest