Furniture spending shows some significant shifts
Jerry Epperson -- Furniture Today, February 19, 2007
The furniture industry is never more frustrating than when the economy is growing but we aren't. We can cite reasons — slower home sales, lackluster consumer confidence, higher debt levels, etc. But what if it's more than that?
My company is in the midst of a major demographic study, and we continue to be amazed at the insights it offers. To make it even more interesting, we are comparing data for 2005 with that from studies we did in the 1980s and 1990s.
For example, in the prior decades, the biggest spenders on furniture were households in the 45–54 age group. The younger two age groups, 25–34 and 35–44, spent slightly less. The extremes, over 55 or under 25, spent much less.
In this decade, however, a new pattern has emerged. The biggest furniture spenders now, by a large amount, are the 35–44-year-olds, with an 18% drop in spending by the 45–54 group and a 13% increase by the 55–64 group.
Folks, this is a big deal. You've heard me preach for years about the massive baby boomers, now 76 million strong, ages 43–61, and their children, the echo boomers or Generation Y, 73 million, ages 10–28. In between is Generation X, ages 29–42, with 48 million people.
Using the latest government statistics, the biggest buyers of furniture (per household) are now the smaller Generation X, and the fastest-growing segments are those that spend less per household.
| Furniture spending per household | ||||||
|---|---|---|---|---|---|---|
| Age group | &25 | 25–34 | 35–44 | 45–54 | 55–64 | 65+ |
| 1985 | $187 | $364 | $372 | $376 | $226 | $133 |
| 2005 | 279 | 533 | 623 | 513 | 580 | 286 |
In bedding, the story is very different. In 1985, spending on mattress sets peaked with the 35–44 year olds, then fell off sharply. The latest statistics show that bedding spending continues to grow per household until it peaks with the 55–64-year-olds, a very wealthy group. Further, while bedding accounts for 10% of all furniture and bedding spending from ages 25 to 44, it is 26% of furnishings spending with the 55–64 group.
| Bedding spending per household | ||||||
|---|---|---|---|---|---|---|
| Age group | &25 | 25–34 | 35–44 | 45–54 | 55–64 | 65+ |
| 1985 | $25 | $44 | $47 | $30 | $28 | $25 |
| 2005 | 37 | 52 | 63 | 65 | 73 | 34 |
Please remember this is the average expenditure for all households, not the expenditure for households who actually purchase furniture or bedding.
Soon we will have this type of analysis for over 900 consumer expenditures and can track the future of each expenditure through 2025.
For now, we have to find more Generation Xers or get the young and the old to spend more.
Got any ideas?
