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Wal-Mart still king; Target shows strong gain

By Furniture Today Staff -- Furniture Today, August 22, 2004

New York — Wal-Mart continues to dominate the discount department store channel in furniture and bedding.

The world's largest retailer increased its share of furniture and bedding sales among the Top 5 discounters to 59% in 2003 from 54% in 2002.

The 2003 Top 5 ranking order remained the same as in 2002, but one player, Meijer, moved from a sales decline in 2002 to a gain in 2003. Meijer joined the Top 5 ranking in 2002.

Wal-Mart's furniture and bedding sales increased 10.9% in 2003, bringing its total to $1.4 billion, up from 2002 sales of $1.2 billion. Contributing to the increase was a surge in store count, with 123 net units added in 2003, bringing the total to 2,949 stores.

A changing store count also had a major impact on Kmart's business. The company — still in second place among the Top 5 — saw furniture and bedding sales plunge 21.4% to $460 million, down from $585 million in 2002.

A major factor was the loss of 316 stores in 2003, following a loss of 283 units in 2002 — a net loss of 599 stores in the two-year period.

Kmart emerged from Chapter 11 bankruptcy protection on May 6, 2003.

In third place is Target, with a strong 10.2% increase in 2003 furniture sales, bringing its total to $325 million. Target also benefited from a strong store expansion program, with 78 net units added in 2003.

No. 4 Meijer recorded a 4% increase in 2003, bringing its furniture sales to $104 million, helped in a small way with the addition of two stores.

ShopKo saw furniture and bedding sales drop 4.5% to $84 million. The company had five fewer stores in 2003 than in 2002, a total of 359 units.

Top 5 discount department stores
Rank			Estimated furniture and bedding Rank sales in $ millions			Total number of units
2003	2002	Company, home base, notes	2003	2002	Percent change 2002 to 2003	2003	2002
All sales information, except for that supplied by publicly held companies which break out furniture and bedding sales, are Furniture/Today market research estimates. All data are for calendar 2003 and 2002, unless otherwise noted. Source: Furniture/Today market research
1	1	Wal-Mart, Bentonville, Ark.	$1,375.0	$1,240.0	10.9%	2,949	2,826
Fiscal year ended Jan. 31. Sales and store counts are for U.S. stores only, including discount, supercenter stores and neighborhood markets, and exclude Sam's Club locations. Plans to open 230 to 240 supercenters in 2004, with 150 as discount store conversions. Entered the California market in March with a supercenter in La Quinta. Plans to open 40 supercenters throughout California over the next five years. As part of a corporate strategy to expand into urban areas, said in May it would build a 150,000-square-foot store in Chicago. Opened its first urban store in St. Paul, Minn., in May. Total 2003 sales were $174.2 billion, up 10.9% from $157.1 billion in 2002.
2	2	Kmart, Troy, Mich.	$460.0	$585.0	-21.4%	1,511	1,829
Fiscal year ended Jan. 28. Closed 316 stores in 2003 and 283 in 2002 as part of its Chapter 11 bankruptcy reorganization. Emerged from bankruptcy protection on May 6, 2003. Has no plans to open stores this year. Has employed a back-tobasics approach in merchandising, and by the end of 2004's first quarter had reduced inventory by 23% from the previous year. Continues to target the Hispanic and urban markets. Opened the Kmart Design Group Office in New York and will unveil its first home collection this fall. Furniture offerings include its Home Essentials brand, O'Sullivan and Martha Stewart Everyday. Total 2003 sales were $23.25 billion, down 20.8% from $29.35 billion in 2002.
3	3	Target, Minneapolis	$325.0	$295.0	10.2%	1,225	1,147
Fiscal year ended Jan. 31. Division of Target Corp. Sales and store counts are for U.S. Target stores only. Opened 101 units in 2003 and closed 23. Plans to add a net 80 to 85 stores this year. Furniture collections include Renovations by Thomasville, its Furio Home house brand, Todd Oldham, Michael Graves and Philippe Starck. Plans to expand its Shabby Chic home textiles line to include home decor, gifts, frames and mirrors this year. In June, Target Corp. sold its Marshall Field's department stores to May Department Stores. Plans to accelerate its direct sourcing from offshore producers in the next few years. Direct sourcing currently accounts for more than 15% of the product mix and is expected to reach 30%. Comp-store sales increased 4.4% in 2003. Total 2003 sales were $41.35 billion, up 12% from $36.92 billion in 2002.
4	4	Meijer, Grand Rapids, Mich.	$104.0	$100.0	4.0%	158	156
Privately-held, family-owned discount superstore, celebrating its 70th anniversary this year. About half of its units are located in Michigan, with the rest in Illinois, Indiana, Kentucky and Ohio. Units average 200,000 to 250,000 square feet. Plans to open five supercenters in existing states and remodel 45 stores this year. Remodeled stores include adjoining home decor and home fashion departments to enhance cross-merchandising. Expansion plans for 2005 include eight new units. Rolled out its At Home With Meijer label in December. As part of its ongoing restructuring, reorganized top management in January and consolidated its store managers from about 42 to 30 per unit. Will unveil its new prototype in the Detroit suburb of Southfield in 2005.
5	5	ShopKo, Green Bay, Wis.	$84.0	$88.0	-4.5%	359	364
Fiscal year ended Jan. 31. Sales and store counts are for ShopKo and Pamida units. ShopKo units are located in 15 Midwest, Western Mountain and Pacific Northwest states and average 91,009 square feet. Pamida units are located in 16 Midwest, North Central and Rocky Mountain states and average 33,468 square feet. Hardlines at ShopKo, including furniture, accounted for 52% of total sales, down from 53% in 2002 and 55% in 2001. Hardlines at Pamida accounted for 65% of total sales in 2003, down from 67% in 2002. Comp-store sales for ShopKo decreased 3% last year, and comp-store sales for Pamida increased 2.8%. Total 2003 sales for ShopKo and Pamida combined were $3.18 billion, down 1.7% from $3.24 billion in 2002.

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