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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

Tax Filing Season: Major Purchases or Splurge Spending: 2016 Google Consumer Survey


This is the final factoid in a series of four factoids detailing the growing emergence of a tax refund season. Many home furnishings advertising and sales events throughout the year focus either on a national holiday or “end of season” promotion. National holidays presumably give consumers an extra day to get out and shop and “end of season” events help retailers clear inventory off floors to make room for new merchandise. Only recently taking form across all consumer products is a sales event that focuses on when consumers actually have extra money to spend.

In a study last year, GOBankingRates.com conducted a Google consumer survey asking consumers if they received a refund and if so, how they plan to spend it. Based on the survey, 70 percent of consumers expected to receive a refund. The majority plan to either pay off debts or put the refund into savings. Almost 13 percent want to use their extra money for a vacation and roughly 13 percent plan to either make a major purchase such as a car or home or splurge on smaller purchases.

While the 13 percent of tax filers receiving a refund expect to spend this money on major or splurge purchases, this number goes up significantly to 17.1 percent for younger Millennials and down to 7 percent or less for consumers ages 55 and over.

Combining IRS statistics with the survey, in 2016, $18.26 billion was available for use on major purchases and splurge spending in February alone – 44.7 percent of the $40.82 billion for the year. An additional $22.6 billion is spread out over the following months – 19.1 percent in March and 13.2 percent in April. Now that efiling has streamlined income tax filing into an easy and fast turnaround for over 90 percent of consumers, a definitive purchasing season has emerged.

Source: GOBankingRates.com, 2016 Google Consumer Survey

Tax Filing Season: How Filers Spend Refunds and Tax Refunds by Age Group: 2016 Google Consumer Survey

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This is the third factoid in a series of four factoids detailing the growing emergence of a tax refund season. Many home furnishings advertising and sales events throughout the year focus either on a national holiday or “end of season” promotion. National holidays presumably give consumers an extra day to get out and shop and “end of season” events help retailers clear inventory off floors to make room for new merchandise. Only recently taking form across all consumer products is a sales event that focuses on when consumers actually have extra money to spend.

 

About 45 percent of last year’s tax refunds arrived in the month of February and an additional 22 percent were received in March. In the last two months of the first quarter of the year, consumers had $202 billion dollars of extra cash in their bank accounts.

In a study last year, GOBankingRates.com conducted a Google consumer survey asking consumers if they received a refund and if so, how they plan to spend it. Based on the survey, 70 percent of consumers expected to receive a refund. The majority plan to either pay off debts or put the refund into savings. Almost 13 percent want to use their extra money for a vacation and roughly 13 percent plan to either make a major purchase such as a car or home or splurge on smaller purchases.

Younger consumers are more likely to both receive refunds and also spend those refunds on consumer purchases as opposed to paying off debt or sticking in a savings account. For the key target groups for the Furniture Industry, 81.0 percent of older Millennials (25 to 34) and 73.3 percent of 35 to 44 year olds expect to receive a refund.

Source: GOBankingRates.com, 2016 Google Consumer Survey

Tax Filing Season: 2016 Filing Season Statistics

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This is the second factoid in a series of four factoids detailing the growing emergence of a tax refund season. Many home furnishings advertising and sales events throughout the year focus either on a national holiday or “end of season” promotion. National holidays presumably give consumers an extra day to get out and shop and “end of season” events help retailers clear inventory off floors to make room for new merchandise. Only recently taking form across all consumer products is a sales event that focuses on when consumers actually have extra money to spend.

In the 2016 tax filing season, over 111 million tax filers received refunds out of the 152 million tax returns processed. At 82.7 percent in 2016, the vast majority of people filing in February are receiving refunds. 41.9 percent of the year’s filers or 46.5 million returns received refunds in February. Another 21.8 percent of filers received refunds in March and 16.2 percent in April with the remaining 20 percent getting money between May and December. 

Almost half of the money paid out in tax refunds (44.7 percent) for the entire year occurred in February – $142 billion out of $318 billion. March accounted for 19.1 percent and April for 13.2 percent of total refund dollars. Less than one-quarter of refund dollars were paid in months May through December. 

With an average refund of $2,860 during 2016, those filing early in February received refunds 6.8 percent higher at an average of $3,053. Both March and April were less – averaging $2,506 and $2,327. Surprisingly, those waiting to file later (between May and December), received an average of $3,271 per refund.

Source: Internal Revenue Service (IRS), 2016 Filing Season Statistics

Tax Filing Season: efile Tax Returns Statistics (by Tax Year): Percent of Taxes efiled by year

This is the first factoid in a series of four factoids detailing the growing emergence of a tax refund season. Many home furnishings advertising and sales events throughout the year focus either on a national holiday or “end of season” promotion. National holidays presumably give consumers an extra day to get out and shop and “end of season” events help retailers clear inventory off floors to make room for new merchandise. Only recently taking form across all consumer products is a sales event that focuses on when consumers actually have extra money to spend.

Thanks to the proliferation of efiling and the increased sophistication of IRS processing, last year $318 billion in tax refund dollars poured into direct deposit accounts and home mailboxes of 111 million tax filers earlier than ever before.

efiling has revolutionized the way people get refunds. In fact, mailing in tax forms is rapidly becoming a thing of the past. The percentage of tax filers efiling tax returns has grown from 30.7 percent in 2001 to 91.0% in 2016 - a climb of 60.3 percentage points. With the IRS currently issuing refunds within 9 to 14 days after receipt of a tax file, filers can receive direct deposits as early as the first week of February. The next factoid will focus on 2016 filing seasons statistics: how many filers received refunds, total dollars refunded by month, and the average refund per tax filer. 

Source: Internal Revenue Service (IRS), *Data is from May 2016

Furniture Stores Top Selling Months: Percent of Annual Sales by Month in Selected Years : 3rd and 4th Quarters

This is the final factoid in a series of four factoids detailing monthly Furniture Store sales and the top selling times of the year to buy furniture and home furnishings. Many life events spur home furnishings purchases. But along with buying a new home, marriage, and having children, the time of the year plays an important part in overall Furniture Store sales. 

Since 2002, Quarter 3 has climbed to the best selling quarter of the year – mostly due to high August sales. The end of summer sales and the lead into Labor Day has kept the month of August percentage of sales at 8.8 percent until 2016. Last year the Labor Day holiday weekend fell solidly in September which boosted it to the highest performing month of the 3rd quarter. Meanwhile July 4th events are producing average sales during a traditional consumer vacation period.

Market share of November and December combined has dropped from 19 percent in 1997 to 17.2 percent in 2016. While still commanding above average sales, the holiday season has lost some appeal as more consumers are choosing to take advantage of income tax refunds in the early spring and late summer sales. In addition, other consumer goods and electronics also compete for consumer dollars during the holiday season. Meanwhile, October has become the second worst performing month behind January averaging 8.0 percent of sales since 2002. 

Source: U. S. Census Bureau, Monthly Retail Trade and Food Services  

Furniture Stores Top Selling Months : Percent of Annual Sales by Month in Selected Years: 1st and 2nd Quarters

This is the third factoid in a series of four factoids detailing monthly Furniture Store sales and the top selling times of the year to buy furniture and home furnishings. Many life events spur home furnishings purchases. But along with buying a new home, marriage, and having children, the time of the year plays an important part in overall Furniture Store sales. 

While the 1st quarter contributed less than 25 percent to Furniture Stores sales in 2016, tax refunds issued at the end of February and throughout March propelled sales upward impacting March significantly. January is negatively impacted especially in markets sensitive to winter weather. And with no big sales event to lure customers, it is the worst performing month of the year for Furniture Stores. February has the draw of big Presidents’ Day sales which helps the weather-sensitive markets recoup somewhat. However, consumers seem to be holding out until spring when income tax refunds arrive. In 2016, almost two-thirds of total annual refunds totaling $203 billion (out of $317 billion) were paid before March 25. March is the only month in the quarter that consistently out performs the average for all months, which is 8.3 percent of sales. 

The 2nd quarter typically produces lower Furniture Store sales than the remainder of the year because of a historically poor performance in April. Memorial Day sales in May always produce excellent sales– an average of 8.4 percent throughout the past two decades. In recent years June has also performed above the average. The next and final factoid of this series will focus on third and fourth quarters. 

Source: U.S. Census Bureau, Monthly Retail Trade and Food Services

Industry Sales by Quarter : 2010 Q1 to 2017Q1: Furniture & Bedding

The furniture and bedding slowed a bit last year, growing a revised 3.2 percent over 2015. In the first quarter of this year, the industry took what’s become its traditional first quarter dip with sales falling 1.2 percent over the previous fourth quarter, but up 3.0 percent over the same quarter last year, 2016Q1. Revised 2016 year end furniture and bedding sales totaled $96.33 billion. First quarter 2017 industry sales reached $24.16 billion.

Furniture (excluding Bedding) in the first quarter increased 3.1 percent compared to the same quarter in 2016 totaling $20.63 billion. Compared to the fourth quarter of 2016, furniture sales fell 2.4 percent. Last year, furniture (excluding bedding) totaled $82.26 billion, up 3.4 percent over 2015.

The Bedding industry finished 2016 a disappointing 1.8 percent growth over 2015. In the first quarter of 2017, bedding sales were up 2.4 percent over the same first quarter of last year and up 6.5 percent over the previous fourth quarter. The fourth quarter is traditionally bedding lowest sales volume segment.  Bedding sales (revised) totaled $14.08 billion last year and $3.53 billion 2017Q1.

Quarter-over-quarter growth shows the slowing of the industry in 2016. The first quarter of this year, however, perked up slightly growing 3.0 percent over the same first quarter last year.  Furniture and bedding sales totaled $24.16 billion in the first quarter compared to $23.45 billion in 2016Q1.

The first quarter is typically the industry’s smallest volume period and compared to the previous fourth quarter, 2017Q1 sales were down 1.2 percent.

Furniture (excluding Bedding) increased 3.1 percent in 2017Q1 versus the same first quarter of 2016 with sales of $20.63 billion. 

Bedding quarter-over-quarter sales totaled $3.53 billion, up 2.4 percent over first quarter of 2015.

Year-to-date industry sales in the first quarter of 2017 totaled $24.16 billion, an increase of 3.0 percent over the same period last year.  

Source:  Impact Consulting Services, Inc. industry model 2016 sales have been slightly revised

Industry Sales by Quarter : 2010 Q1 to 2017 Q1Bedding Industry

In keeping with this seasonality, 2017Q1 Bedding sales were up 6.5 percent over the fourth quarter. Compared to the first quarter last year quarter sales of $3.5 billion were 2.4 percent higher.  Last year the Bedding industry totaled $14.1 billion, a disappointing 1.8 percent increase over 2015.

The slow growth in 2016 in the Bedding industry is reflected in the quarter-over-quarter performance. Bedding sales in the first quarter this year up  2.4 percent quarter over quarter totaling $3.53 billion. 

First quarter 2017 bedding sales totaled $3.53 billion, up 2.4 percent from the same period last year. 

Source:  Impact Consulting Services, Inc. industry model 2016 data has been slightly  revised

Furniture Stores Top Selling Months
: Percent of Furniture Store Sales by Quarter 
in Selected Years

This is the second factoid in a series of four factoids detailing monthly Furniture Store sales and the top selling times of the year to buy furniture and home furnishings. Many life events spur home furnishings purchases. But along with buying a new home, marriage, and having children, the time of the year plays an important part in overall Furniture Store sales. 

Economic events can always alter consumer confidence, but the overall monthly ebb and flow of Furniture Store sales has changed through the years. Once the pinnacle of furniture purchases, the November/December holiday season has lost some of its sales glamour, not only with furniture but will all consumer products as a total group. It is still the biggest season in total retail sales of consumer goods, but no doubt the 4th quarter has lost market share. For Furniture Stores, May and August have always been steady and strong, but March has emerged as a huge sales month. Online filing of income tax returns has resulted in quick returns for the end of February and especially throughout March. 

Two decades ago in 1997, the 4th quarter far outreached the previous three quarters in Furniture Store sales. At 27.6 percent, the 4th quarter was 4.4 percent higher than the 1st quarter’s dismal 23.2 percent. Over the next 15 years, both quarter 1 and quarter 3 percentage of sales increased, while quarter 4 dropped below 25 percent. Although 2016’s holiday season performed better than 2012, quarter 3 rises as the year’s top-performing period. 

Source: U.S. Census Bureau, Monthly Retail Trade and Food Services

Furniture Stores Top Selling Months: 
Big Sales Events and Monthly Index of Furniture Sales

This is the first factoid in a series of four factoids detailing monthly Furniture Store sales and the top selling times of the year to buy furniture and home furnishings. Many life events spur home furnishings purchases. But along with buying a new home, marriage, and having children, the time of the year plays an important part in overall Furniture Store sales. 

Economic events can always alter consumer confidence, but the overall monthly ebb and flow of Furniture Store sales has changed through the years. Once the pinnacle of furniture purchases, the November/December holiday season has lost some of its sales glamour, not only with furniture but will all consumer products as a total group. It is still the biggest season in total retail sales of consumer goods, but no doubt the 4th quarter has lost market share. For Furniture Stores, May and August have always been steady and strong, but March has emerged as a huge sales month. Online filing of income tax returns has resulted in quick returns for the end of February and especially throughout March. 

Throughout the 1990’s and up until the mid 2000s leading up to the Great Recession, November and December trended as the largest sales months for Furniture Stores, often combining to capture 18 percent to 19 percent of annual sales. The exception was in December 2002 and 2007 when economic downturns and uncertainty impacted Furniture Store performance in December. However, since coming out of the Great Recession, the entire 4th quarter has garnered less importance to the Furniture Industry. 

Note that an index of 100 represents the average month (annual sales divided by 12 months). An index of 115, for example, indicates sales were 15 percent higher this month than the average.

Source: U.S. Census Bureau, Monthly Retail Trade and Food Services

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