Working together, our industry can look forward to a more stable and prosperous future

IHFRA offers key takeaways from Home Furnishings Association DC Fly-In

WASHINGTON — Last week, Steve Allegrezza, executive director at the International Home Furnishings Representatives Association, attended and participated in the Home Furnishings Association DC Fly-In.

According to Allegrezza, the event is a cornerstone for IHFRA and its members as it provides an opportunity to advocate for our industry on Capitol Hill.

While there, he came back with a handful of eye-opening statistics shared during these meetings.

Clearly, they are worth sharing here as well.

• National Debt: The national debt has reached a staggering $35 trillion.
• Household and Credit Card Debt: Household debt and credit card debt are on the rise, with 9% of all credit card debt in some stage of delinquency.
• Consumer Confidence: Consumer confidence is at its lowest since March 2020.
• Economic Indicators: While the GDP is higher than income, the small business index is at its lowest since 2012. Manufacturing has been down for over a year.
• Cost of Living: The average American family is paying an extra $800-$1,000 per month in cost-of-living expenses because of inflation, with prices for food, housing and energy up 18%.

These statistics paint a clear picture of the economic challenges facing Americans today, challenges that directly impact our industry.

The American Home Furnishings Alliance was also present in several of our meetings, which shed light on some of our industry pain points for manufacturers, including:

1. Economic Pressure: Manufacturers are working harder than ever to break even, with rising costs for talent and excessive regulation exacerbating the sense of relentless effort without significant progress.
2. Tax Cuts and Jobs Act: The impending expiration of key provisions in the Tax Cuts and Jobs Act at the end of 2025 poses a significant threat, particularly to small and medium-sized businesses.
3. Market Conditions: High interest rates, low consumer confidence and a weak housing market are creating a tough environment for growth. The consolidation of retail partners further limits opportunities for expansion and stability.

Retailers are not immune to these challenges, and the issues they face were a major focus of the discussions:

1. Shift to Needs-Based Purchases: Retailers at entry-level price points are struggling as consumer confidence remains low, and inflationary pressures hit low-income families hardest. Many retailers are pivoting to higher-end goods to target consumers with disposable income.
2. Credit Card Fees: The Consumer Financial Protection Bureau’s efforts to reduce excessive fees have ironically led to increased fees on financing options. While retailers absorb as much as possible, some charges get passed on to the end consumer.
3. Operational Costs: Rising costs for insurance, supply chains and other operating expenses are squeezing margins. The worker shortage is also driving up wages, compounding financial pressures.
4. Housing Market Impact: High interest rates and a limited supply are driving up housing costs by 8%-10% annually, pricing many families out of the market and reducing disposable income for home furnishings.

“The pain points we discussed with manufacturers and retailers mirror the broader struggles facing the nation,” Allegrezza said, adding, “Just as our industry grapples with high costs, low consumer confidence and economic uncertainty, so too does the average American family. The feedback from lawmakers was clear: No immediate change is coming to our economic conditions until after the election cycle. However, there are some positive signs that suggest resilience and growth within our economy.”

A path forward

Despite the challenges, there are reasons for optimism, Allegrezza said. Data indicates that our economy remains resilient and continues to grow. Notably, GDP growth is being driven by robust consumer spending. Additionally, the Federal Reserve projects that inflation will stabilize over the next year, providing a more predictable environment for businesses and consumers alike.

While the immediate legislative landscape may not change until after the elections, these indicators offer hope for a more stable economic future.

Manufacturers and retailers, much like the average American, feel like they are working twice as hard to make ends meet. Yet, there is strength in their perseverance. The fact that they continue to operate and adapt underlines the resilience of our industry.

To help weather this storm and prepare for the opportunities ahead, consider the following actions:

• Utilize Your Most Valuable Asset — Your Relationships: Show up and be present. Be a consultant, a resource and a trusted adviser for your retail customers. Your relationships are your strongest asset in challenging times.
• Adapt and Pivot: Remember, no change means no growth. Consider reviewing your business or your business model. Are you getting what you need from the factories you represent? Stay flexible and open to new strategies that can drive success.
• Collaborate and Network: Use IHFRA’s resources to connect with peers, share best practices and support each other. Strong networks and collaborative efforts can provide the support and insights needed to thrive.

Despite the challenges that came to light during the meeting, Allegrezza told me he came back hopeful that, “Together, we can navigate these turbulent times and emerge stronger. Let’s continue to support each other, stay resilient and look forward to a more stable and prosperous future for our industry.”

I think he hit the nail on the head. The operative word here is together. We are stronger together; we are more effective together. 

Working together, we can win. Divided, we all lose.