Big bedding retailers boost 2002 sales 10.4%
By Michael J. Knell -- Furniture Today, September 29, 2003
Toronto — Canada's Top 5 bedding retailers continue to dominate, boosting aggregate bedding sales 10.4% last year and capturing over half the market — 52.3% compared to 50.6% in 2001.
Price and promotion continue to drive retail action, but Sears Canada, the No. 1 bedding merchant, last year changed its pricing strategy, moving away from a discount approach to value-based pricing.
The results so far have been mixed, but Bruce Watton, national business manager/furniture, believes the strategy will prove a winner in the long run, building a sense of value and consistency in the minds of Sears Canada's core customer.
"You cannot go into the market and offer the consumer 40% and 50% off, then change your pricing matrix and not experience some ebb in sales," Watton said. "The reality is we'd like to move towards sleepability and comfort, and that's not been a conversation we've had with the customer. But that's where we're heading."
Sears Canada has been this country's leading furniture and bedding retailer for some time. Its Sears-O-Pedic brand long has been the centerpiece of its bedding efforts and remains its bestseller. But last year, Sears unveiled a national brand strategy, flooring and promoting Sealy, Simmons and Serta alongside its own brand.
Amidst these shifts in strategy, Sears Canada's bedding sales grew 7.1% in 2002 to an estimated C$150 million, giving it a 17.2% slice of the retail bedding market.
While the other members of the Top 5 often have other brands in their mix, particularly Kingsdown at the upper end, they also stress the Three S's — Sealy, Simmons and Serta — as key components of their lineups.
The second- and third-place retailers are proof that price and promotion are what it takes to win the bedding consumer.
Sleep Country Canada, which burst onto the scene in 1994, is the Top 5's runaway growth leader, with sales spurting 19.3% in 2002 to C$142 million. With a market share of 16.3%, it's beginning to rival Sears Canada.
Company officials declined to be interviewed, but Sleep Country Canada is widely credited with changing how bedding is sold in this country.
"They have many strengths, the strongest of which is their advertising and marketing," said one senior factory executive. "They are flawlessly consistent and build a lot of top-of-mind awareness. That is the thing that separates them from their competitors."
"They reinvented how bedding needed to be sold and brought the average price up significantly," another executive said. "They just keep getting better every year, and one reason for that is that their people are so well trained."
Company advertising, mainly television and radio, always features SCC President Christine Magee, who has become something of a household name in Canada and has been profiled extensively in the consumer press. The spots reinforce Sleep Country's position as a sleep expert while also stressing price offerings.
SCC is the only bedding specialist on the Top 5, evidence that many Canadians still expect to buy bedding where they buy furniture.
Most industry observers expect Sleep Country Canada to take over the No. 1 spot in the not-too-distant future.
"It's hard to fight a specialist unless you become a specialist," one executive said.
Also widely praised for consistent advertising and promotion is The Brick, which saw its bedding business grow 7.7% to C$70 million last year.
"Unlike many furniture retailers, The Brick looks at their mattress business as a separate business," one factory executive said. "They have set up a marketing program to support their mattress business that is beyond what most retailers will do."
"They are very aggressive in their advertising," another executive said. "They see bedding as a consumer need every day and they're doing a tremendous job in mattresses."
While The Brick is a big TV advertiser, it also has an extensive direct mail/flyer program, every issue of which has at least a page devoted to bedding. It also offers give-aways, such as a TV set or DVD player with the purchase of a particular sleep set.
Like Sleep Country and The Brick, department store The Bay also sticks to a traditional marketing model for bedding, and may have benefited from the change in strategy at Sears Canada. "There is a department store customer," one executive said, "so the only option for them is to go to The Bay and buy at 50% off."
"The Bay is very consistent at what they do," another observer noted. "Their advertising is very consistent and they maintain a clean, good-looking floor."
Bedding sales at The Bay were up 6.1% last year to C$52 million.
Leon's is the only member of the Top 5 that doesn't use a price discounting strategy in bedding.
"We don't employ tactics that we see as less than forthright," said Eddie Leon Jr., vice president of marketing for the publicly held, family-managed retailer. "We haven't changed our approach when it comes to bedding. We don't want to get into the outlandish offers we see others doing. It's not consistent with how we do business."
Although Leon's helped pioneer no-no-no promotions in this country, it rarely stresses sale prices as such, preferring to emphasize consistent value pricing. "We're trying to keep our focus on telling the consumer that they don't need to get a free TV with their sleep set to get a good value," Leon said.
| Canada's Top 5 bedding retailers | ||||||
|---|---|---|---|---|---|---|
| Sales in millions of current Canadian dollars | Percent change | Market share | ||||
| Rank | Company, headquarters, Web site, notes | 2002 | 2001 | 2001 to 2002 | 2002 | 2001 |
| Sources: Furniture/Today market research, Industry Canada, Statistics Canada | ||||||
| 1 | Sears Canada | $150.0 | $140.0 | 7.1% | 17.2% | 17.1% |
| Toronto www.sears.ca | ||||||
| Sells bedding through its mall-based department stores, freestanding furniture and appliance stores, independent dealer stores and general merchandise catalog. Last year, launched a national brand strategy for bedding, flooring Sealy, Simmons and Serta to supplement its well-established Sears-O-Pedic brand. With the opening of freestanding furniture stores, the company initially withdrew bedding from its department stores, but later re-introduced bedding aisles in those stores. Total furniture, bedding and accessory sales in 2001: $684 million. | ||||||
| 2 | Sleep Country Canada | $142.0 | $119.0 | 19.3% | 16.3% | 14.5% |
| Toronto www.sleepcountry.ca | ||||||
| Founded in 1994, this sleep shop chain is widely credited with changing the Canadian bedding industry. Went public earlier this year, becoming a wholly owned subsidiary of Sleep Country Canada Income Trust. Ninety-four percent of sales from sleep sets, the balance from metal beds, mattress pads, linens and pillows, etc. Operates 81 stores in six regional markets in British Columbia, Alberta and Ontario. Sells only the Sealy, Simmons and Serta brands. Total sales in 2002, $151.3 million; 2001, $127 million. | ||||||
| 3 | The Brick | $70.0 | $65.0 | 7.7% | 8.0% | 7.9% |
| Edmonton, Alberta www.thebrick.com | ||||||
| Privately owned, promotional to midpriced chain aggressively sells bedding, mainly the Three S's; all have galleries at its Homeshow Canada superstore in Toronto. Total furniture, bedding and accessory sales in 2001: $350 million. | ||||||
| 4 | The Bay | $52.0 | 49.0 | 6.1% | 6.0% | 6.0% |
| Toronto www.hbc.com | ||||||
| The department store retail brand of The Hudson's Bay Co., which also owns Zellers, this country's largest mass merchandiser, and Home Outfitters, a rapidly growing bed and bath, home accessories and linens retailer. Of the 100 department stores it currently operates across the country, 93 have sleep shops. Total furniture, bedding and accessory sales in 2001: $200 million. | ||||||
| 5 | Leon's Furniture | $43.0 | $41.0 | 4.9% | 4.9% | 5.0% |
| Toronto www.leons.ca | ||||||
| Publicly held, family-managed, high-impact promoter continues to be one of the most consistently solid performers in the Canadian furniture industry. Total furniture, bedding and accessory sales in 2001: $409 million. | ||||||
| Top 5 total | $457.0 | $414.0 | 10.4% | 52.3% | 50.6% | |
| Total retail bedding sales | $873.0 | $818.0 | 6.7% | |||
