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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

Furniture Industry Sales by Retailer Type: 2009 to 2018

E-commerce furniture and home furnishings websites continue to chip away at brick and mortar retailers, reporting a double-digit growth of 22% in 2018 compared to single-digit growth by other furniture and home furnishings retail channels.

This is the fourth factoid in a series of five factoids detailing how despite predictions that the rate of e-commerce growth in the furniture industry would slow, e-commerce sales have continued increase at over 20% annually in recent years.

Of the $112.8 billion furniture industry, sales can be distributed between (1) brick and mortar stores, (2) e-commerce retailers plus e-commerce sales by brick and mortar companies, and (3) mail order houses., In 2018, furniture and bedding sales by brick and mortar stores (non-internet) totaled $87 billion compared to $23.9 billion for e-commerce and $1.9 billion from mail order houses.

E-commerce continues to gain a greater share of the furniture industry – jumping from 3.8% of sales in 2009 to 21.2% in 2018. This includes not just sales by e-commerce retailers, but also online sales by brick and mortar retailers of all types – including furniture and home furnishings stores, department stores, warehouse superstores, etc. Meanwhile, brick and mortar share of total sales fell from a 93.5% in share in 2009 to 77.1% in 2018 - decreasing 6.6 percentage points from 2017 to 2018.

Source: Impact Consulting Services Inc.’s FurnitureCore.com proprietary Industry Model; U.S. Census Bureau’s Annual Survey of Retail Trade (e-commerce) with salves revised Sept. 2019. 2018 preliminary estimates.

E-commerce Continues Double-Digit Furniture Industry Growth

E-commerce furniture and home furnishings websites continue to chip away at brick and mortar retailers, reporting a double-digit growth of 22% in 2018 compared to single-digit growth by other furniture and home furnishings retail channels.

This is the third factoid in a series of five factoids detailing how despite predictions that the rate of e-commerce growth in the furniture industry would slow, e-commerce sales have continued increase at over 20% annually in recent years.

While internet purchases have continued to gain a bigger piece of the retail pie over recent years, online sales represented only 8.6% of all retail sales for all consumer products in 2018. And mid year-to-date that percentage has declined slightly – down to 7.5% with mail orders picking up to 4.4%.

Brick and mortar retailers have tried various approaches to competing with e-commerce retailers by attempting to market through their own websites, but with little success. Furniture and home furnishings stores lag behind other retailer types in terms of e-commerce sales as a percent of total sales. E-commerce sales were 1.2% of total sales in 2017 for brick and mortar furniture and home furnishings stores, compared to 3.8% for clothing stores, 2.9% for sporting goods, hobby, and bookstores, and 2.1% for electronics and appliance stores. While the success of online retailing among brick and mortar merchants has increased over the years, the e-commerce sales comparison remains vast between brick and mortar stores and pure e-commerce retailers.

Source: U.S. Census Bureau, Annual Survey of Retail Sales and Monthly E-commerce report (1) Includes Brick & Mortar store sales either sold at their stores or through the company's website. Note:  Brick & Mortar companies that have dedicated business models to online sales and carry a wide range of products not available in the retailers' stores are considered E-Retailers for that business model. Their stores sales, however, are included in the Brick & Mortar category.

E-commerce Continues Double-Digit Furniture Industry Growth

E-commerce furniture and home furnishings websites continue to chip away at brick and mortar retailers, reporting a double-digit growth of 22% in 2018 compared to single-digit growth by other furniture and home furnishings retail channels.

The explosive e-commerce growth comes in spite of a report indicating only 14% of consumers actually prefer to purchase furniture online (Euclid Analytics). This leaves brick and mortar retailers scratching their heads how to give consumers the shopping experience they apparently prefer.

This is the second factoid in a series of five factoids detailing how despite predictions that the rate of e-commerce growth in the furniture industry would slow, e-commerce sales have continued at over 20% annually in recent years.

The retail furniture industry reached $112.8 billion last year, a growth of 7.0% over 2018. While total furniture and bedding retail sales have maintained robust growth through 2018, 2019 year-to-date has slowed – only increasing 3.6% from 2018 Q3 YTD to 2019 Q2 YTD.

Sales of combined furniture and home furnishings through e-commerce retailers have increased from $7.9 billion in 2006 to an estimated $59.7 billion in 2018 – an average per year growth since 2009 of 23%.

Source: Impact Consulting Services Inc.’s FurnitureCore.com proprietary Industry Model; Comprehensive revisions by the U.S. Bureau of Economic Analysis to Personal Consumption Expenditures (Consumer Spending) have been incorporated in the Industry Model.

U.S. Census Bureau, Annual Survey of Retail E-commerce sales; data available through 2017 
*E-commerce retailers are those retailers without storefronts with or companies with dedicated online business models.

E-commerce Growth

E-commerce furniture and home furnishings websites continue to chip away at brick and mortar retailers, reporting a double-digit growth of 22% in 2018 compared to single-digit growth by other furniture and home furnishings retail channels.

This is the first factoid in a series of five factoids detailing how despite predictions that the rate of e-commerce growth in the furniture industry would slow, e-commerce sales have continued at over 20% annually in recent years.

Total U.S. E-commerce

Internet sales of all consumer products from all retail outlet types, e-commerce companies or brick and mortar stores selling from internet websites, are estimated to have reached $524 billion in 2018.

In 2018, overall online/e-commerce retail purchases for all consumer products slowed, but still grew 3.6 times faster than all other retail channels. At $269 billion year-to-date, e-commerce growth is 5.9 times faster than the first half of 2018. Total retail sales increased by 5% from 2017 to 2018, compared to 14% for e-commerce.

A recent report published by the Census Bureau segments sales by e-commerce retailers by merchandise lines through 2017 giving a glimpse at penetration by product category.

Among different types of e-commerce retailers, online sales of furniture and home furnishings products was the third highest product category in sales at $48.7 billion – increasing 22.3% from 2016 to 2017 (Figure 2). Ranking number one in sales growth, computer software including video games, grew by 23.9% to reach $15.4 billion in 2017. At $66.7 billion, clothing and clothing accessories had the highest sales among e-commerce retailers and with an annual increase of 11%.

Source: U.S. Census Bureau, Annual and monthly survey of retail sales
*Total E-commerce sales, both from e-tailers and brick and mortar stores through a website.
**most recent data available through 2017.

Charting the Progress of Survival : Existing Stores Progress

2007 – 2008 vs. 2015 – 2016

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 final 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 the shakeout continues, the stores left standing (existing stores) are showing signs of some stabilization. Comparing an annual employment growth from 2007 to 2016, progress is tracked in terms of whether existing stores grew employment, lost workers, had stable employment, or closed their doors by year end. There are two important positive outcomes from this comparison. First, the number of stores increasing employees or with stable employment increased from 54.7% of the total existing stores at the beginning of 2007 to 70.9% by 2016. Also, the percent of existing stores that closed was almost cut in half in 2016 versus 2007, 6.6% closed (2016) compared to 12.8% (2007).

The percentage of existing home furnishings stores that closed by year end has decreased from 11.5% in 2007 to 7.7% in 2016. While the percent of existing home furnishings stores open at year end decreasing in employee size has fallen 5.2 points to 25.6% in 2016, the percent of existing stores open at year end increasing in employee size has grown slightly by 0.6 points to 24.8%.

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

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