Furniture sales near $50 billion
By Vicky Jarrett -- Furniture Today, September 16, 2001
This Furniture Store Performance Report marks Furniture/ Today's 10th year to offer this benchmark against which retailers of all sizes can measure their store performance.
Since the first report in 1992, furniture store sales have climbed at a steady pace. Even during less robust economic times, furniture retailers managed to post some increase in sales. Furniture store sales in 1991, according to the U.S. Department of Commerce, were charted at $30.2 billion dollars. By the mid- '90s, that number was edging closer to the $40 billion mark, and the most recent numbers for 2000 put furniture stores sales at $48.2 billion.
While the big picture is important, it is the every-day important, and even urgent, details of business that keep furniture retailers busy. It is good to stop and evaluate how their stores stack up to the industry medians.
While the competition of e-commerce operations has become somewhat more stable after its meteoric rise in the late 1990s and equally dramatic fall last year, competition for the consumer's dollar is as sharp as ever. The slow — some would even say recessionary — economy requires that retailers be razor sharp with every aspect of operation.
Armed with the data from this report, furniture retailers can pinpoint their strengths and weaknesses as compared to retailers across the country.
The Furniture Store Performance Report, which documents operating results for fiscal years ending between Dec. 31, 2000, and May 31, 2001, includes key measurements in profitability, merchandise performance and buying practices. An earlier report (see Furniture/Today, July 9, 2001) focused on measurements in employee productivity.
This year's report tracks for the second year measurements about the vendor performance experience: How long does an order take from the time it is placed with the manufacturer to the time it is delivered to the customer? What percentage of products received from the vendor must be repaired or returned? The data shows some improvement in both the time frame and the quality of product since last year's report.
New to the Furniture Store Performance Report is data focusing on imports. Offshore sourcing is growing by leaps and bounds, and more and more retailers are importing directly, with dining room and bedroom furniture at the top of the shopping list.
Before taking any steps to improve a business' performance, quantifiable information must be available for tracking and comparison. With this report, Furniture/Today is providing the analytical tools you need to understand where you excel as well as where you have the greatest opportunities for improvement.
| ALL STORES | |
|---|---|
| Profitability measures | |
| Medians | |
| Gross margin percentage | 42% |
| Return on sales | 6% |
| Return on assets | 11% |
| Return on net worth | 23% |
| Source: Furniture/Today market research and BDO Seidman | |
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