Consumers budgeting less for purchases in '05
By Dana French -- Furniture Today, October 2, 2005
This year, households have budgeted less for a stationary sofa and a recliner than the amount households spent on each product last year. According to Furniture/Today's exclusive Consumer Buying Trends survey, high-end stationary sofas are losing buyers and market share in 2005, while midpriced and promotional sofas are gaining ground. And, the same is true for reclining chairs.
At the high-end of the price spectrum, 37% of sofa-buying households spent $1,100 or more in 2004, and only 21% of sofa shoppers say they'll spend that much this year. With midpriced sofas, 29% of buyers spent between $600 and $1,099 last year, and 43% plan to spend in that range in 2005. For promotional sofas, 34% of sofa buyers spent less than $600 in 2004, and 36% have budgeted that amount this year.
For recliners, 15% of households bought at the high-end last year, and only 9% of potential recliner buyers have budgeted $800 or more for their purchase in 2005. With midpriced recliners, 45% of buyers spent between $400 and $799 in 2004, and 48% of potential buyers say they'll spend in that range this year. With promotional recliners, 40% of buyers spent less than $400 last year, and 43% of those planning to buy this year plan to spend that much.
Consumer's budgets aren't set in stone however. In both focus groups and earlier surveys conducted by Furniture/Today, consumers indicated that price, while an important consideration, is not their primary criterion when choosing upholstery. Number 1 on the list of things they're looking for is comfort, followed by durability, overall quality, style and appearance. Price is fifth on the list. Consumers also said they will spend more than what they've budgeted if they find something they like.
More good news — a higher percentage of households plan to buy each product this year — 8.8% of U.S. households plan to buy a stationary sofa in 2005, compared with 7.9% that bought one last year. Demand for recliners is even higher: 7.5% plan to buy a recliner this year, compared with 5.9% that bought one in 2004. If consumers buy what they say they will and spend the maximum amount they've budgeted, then consumer spending for both stationary sofas and recliners will be larger than it was in 2004.
Stationary sofa target consumers by price point:
High — High-income households, those earning $75,000 or more, comprise 62% of those planning to spend $1,100 or more on a stationary sofa this year, and households making $100,000 or more account for 33% of all potential buyers. Other likely buyers include Baby Boomers, Generation Xers and households living in the South.
Middle — Midpriced sofas are appealing to all income brackets — high-income households account for 32% of all potential buyers and low-income households account for 39%. The Happy Days Generation comprises 34% of households planning to buy a sofa priced between $600 and $1,099, and renters account for 31% of potential buyers.
Low — Households making less than $40,000 account for 55% of those planning to buy a promotional sofa this year. Other potential buyers planning to spend less than $600 include Generation Y, Hispanics and those living in an apartment or mobile home.
Recliner target consumers by price point:
High — High-income households represent the largest group of potential recliner buyers at the high-end at 47%, and households making less than $40,000 account for 35%. Other potential high-end buyers include Baby Boomers, households living in the South and those living in a house or condominium.
Middle — Three-fifths of households planning to buy a midpriced recliner this year have incomes of less than $60,000. Other likely demographic groups planning to spend between $400 and $799 include members of the Happy Days Generation, households living in the Northeast and Hispanics.
Low — Households earning less than $40,000 account for 61% of those planning to buy a promotional recliner in 2005. Baby Boomers comprise 51% of households planning to spend less than $400 this year on a recliner. Other likely buyers of promotional recliners include households living in the Midwest, those with children living at home and renters.
| Stationary sofa | Recliner | |
| 8.8% | Percent of U.S. households planning to buy in 2005 | 7.5% |
| $10.1 billion | 2005 sales potential* | $4.4 billion |
| % of households buying | % of total plan-to-spend dollars | sales potential* in $ billions | |
|---|---|---|---|
| High | 21% | 44% | $4.4 |
| Middle | 43% | 42% | $4.2 |
| Law | 36% | 14% | $1.5 |
| % of households buying | % of total plan-to-spend dollars | sales potential* in $ billions | |
|---|---|---|---|
| High | 9% | 24% | $1.8 |
| Middle | 48% | 53% | $4.0 |
| Low | 43% | 23% | $1.7 |
*The 2005 sales potential assumes all households planning to buy actually make a purchase and spend the maximum amount planned. Actual sales figures in 2005 may be higher or lower.
Who's buying?
by price point
| in 2005 ... % of U.S. households planning to buy a stationary sofa | |||
|---|---|---|---|
| Low | Middle | High | |
| Household income | $599 & below | $600 to $1,099 | $1,100 & above |
| Under $30,000 | 39% | 23% | 5% |
| $30,000 – $49,999 | 22% | 26% | 15% |
| $50,000 – $74,999 | 23% | 19% | 18% |
| $75,000 – $99,999 | 10% | 14% | 29% |
| $100,000 or more | 6% | 18% | 33% |
| Generation | |||
| Generation Y Born 1976 to 1987 | 15% | 10% | 2% |
| Generation X Born 1965 to 1975 | 20% | 22% | 29% |
| Younger Baby Boomer Born 1956 to 1964 | 25% | 13% | 18% |
| Older Baby Boomer Born 1946 to 1955 | 24% | 20% | 29 |
| Happy Days Generation Born 1936 to 1945 | 15% | 34% | 18% |
| Senior Senior Born 1935 or before | 1% | 1% | 4% |
| % of U.S. households planning to buy a recliner | ||
|---|---|---|
| Low | Middle | High |
| $399 & below | $400 to $799 | $800 & above |
| 48% | 23% | 29% |
| 26% | 27% | 18% |
| 12% | 22% | 6% |
| 10% | 12% | 29% |
| 4% | 16% | 18% |
| 4% | 3% | 6% |
| 19% | 9% | 17% |
| 31% | 12% | 6% |
| 20% | 32% | 47% |
| 24% | 39% | 12% |
| 2% | 5% | 12% |
Source: Furniture/Today Consumer Buying Trends Survey, 2005
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Occasional, entertainment buying trends
Dec 11, 2005
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