by 70% of those interviewed at market believe furniture purchasing will remain steady or increase in 2nd half
HIGH POINT — A survey of retailers attending the recently concluded April High Point Market by TD Bank showed that more than half of those interviewed were concerned about the economy in the coming months.
However, many believe that consumer furniture purchasing will remain steady or increase in the second half.
The survey was based on about 155 responses from retailers attending the High Point Market April 22-26.
Some 54% of the retailers surveyed said economic uncertainty remained their top concern for the next six months. Another 17% were concerned about price increases related to inflation, and nearly 13% said they were concerned about price increases from suppliers. Nearly 10% said they were concerned about supply chain disruptions.
However, 70% said they also believe that furniture purchasing will remain steady or even increase in the second half. Another 15% said they were unsure, and another nearly 15% said they thought spending on home furnishings would decrease.
Some 38% also said that their sales have remained normal despite increased prices and lingering supply chain issues, while another nearly 30% said that while higher prices have reduced sales, they don’t have surplus inventory as they previously adjusted purchases.
Nearly 26% said that higher prices have reduced sales, which has resulted in higher-than-average inventories.
“I think what surprised me the most was the general optimism we saw in the survey,” Mike Rittler, head of Retail Card Services at TD Bank, told Home News Now. “I thought we would see a little more pessimism actually, so it was good to seen the optimistic outlook from some of the folks we talked to.”
“There was a little nervousness right now,” he said of concerns about the economy. “But generally, there was a view that as we move throughout the year, there are better things on the horizon than where we are right now.”
The survey follows three back-to-back months of either flat or year-over-year declines in sales at furniture and home furnishings stores. While sales rose 3.8% in January, they were followed by a tepid .1% increase in February and a 2.4% and 6.4% decline in March and April, respectively, according to the U.S. Department of Commerce.
“That is why the optimism in the responses surprised me, because the last few months have been challenging and a lot of the dialogue we have been having has been about the decrease in foot traffic,” he said, adding that other retailers outside the furniture industry also have talked about a drop in foot traffic. “Foot traffic has slowed, buying has slowed — everything has gone into a little bit of a contraction. The good thing is that we are well into May, and May is starting to look a little stronger than April so that is good news. Maybe we are turning the corner a little.”
Based on the 70% figure, he believes the market for the industry could improve sometime between July 4 and Labor Day as consumer confidence improves, inflation continues to stabilize and people who are now spending more money on things like travel and dining out will gravitate back to furniture.
Below are some other highlights from the survey:
+ About 21% of those surveyed offer financing options (a figure Rittler found to be quite low), and another 10% are considering adding financing options to their offerings.
+ By category, 53% said living room furniture is the highest performing segment of their business. This was followed by 14% who identified dining furniture for the kitchen.
+ Other categories did not fare nearly as well. For example, only 7% identified bedroom as a major driver of their business, followed by 7% who said outdoor furniture.
+ By comparison, only 4.5% said home office furniture and 2.5% said home entertainment.
“If we go back 18 months to two years, during the height of the pandemic, recreational furniture, outdoor furniture and home office would have been off the charts,” Rittler said. “But now, combined, those categories are under 15%.”
