ISPA: Specialty sleep down in '06
Numbers show 0.2% drop in unit shipments last year
By David Perry -- Furniture Today, July 23, 2007
High Point — More specialty sleep beds are on tap for the upcoming Las Vegas Market, an indication that producers see plenty of growth ahead in that category.
Virtually every major bedding producer is adding specialty sleep models to its lineup, with a particularly strong offering of latex models. New visco-elastic beds will also be featured in key bedding showrooms.
Retail interest in the category remains strong, leading producers say.
The specialty sleep rocket has been blazing upward for years, according to conventional wisdom. But that wisdom took a serious hit recently when the International Sleep Products Assn. reported that unit shipments of specialty sleep mattresses actually declined in 2006. The reported decline — 0.2% — was modest, but it still marks a dramatic change of fortunes for a category that has been the growth star of the industry.
Leading specialty sleep producers don't directly dispute that ISPA number, contained in ISPA's 2006 Mattress Industry report, but they do say that the monthly numbers that ISPA reports on specialty sleep are a more accurate indication of what is happening in their category.
The monthly numbers for 2006 show that specialty sleep units grew by 2.7%, with dollars posting a 15% gain, according to ISPA's reports. But even those monthly reports show the specialty sleep category in negative unit territory in five months last year: January (down 5%), April (down 6.8%), July (down 1.2%), August (down 1.3%) and September (down 0.3%). Those poor months in the third quarter gave the category an overall decline in that quarter of 0.9%.
Dollars remain strong
Specialty sleep dollars, on the other hand, were down in only one month — January, with a 3.4% decline — but generally posted double-digit increases for the other months last year.
Still, the reality of monthly declines marks a new development for the specialty sleep category, one indicating that the category is not immune from downturns.
ISPA says that its monthly reports represent about 60% of the industry's wholesale dollar volume, and about 50% of its unit shipments.
The specialty sleep industry's two largest producers — visco leader Tempur-Pedic and airbed leader Select Comfort — both reported strong unit and dollar increases last year, and they say the category continues to have plenty of momentum.
Both of those companies suggest that ISPA's annual report, which the bedding association says represents a comprehensive view of industry performance, is not a good measure of how the specialty sleep category is performing.
Contributing factors
Rick Anderson, president of Tempur-Pedic North America, said the ISPA annual report "is based on a census estimate that includes many companies in addition to those that provide regular monthly data reported through the Bedding Barometer."
And he says that attrition among some specialty sleep producers affects the numbers in the annual report. "A large percentage of the unit shipments made in 2005 were from low-priced, specialty knock-off producers whose products often proved to be less than optimal specialty solutions," Anderson said. "Many of these companies are no longer significant producers of specialty bedding and did not contribute to unit sales in 2006. The unstable nature of the producer base and the low prices they were charging during 2005 indicates the potential for instability in the census numbers over this period."
On the other hand, he continued, "the stable base of legitimate producers found in the monthly Bedding Barometer reports gives a more accurate picture. By reviewing the Bedding Barometer reports for 2006, you will see a very different trend among the larger, legitimate specialty bedding companies. These companies are long-standing members of the bedding industry and ISPA and have applied a consistent reporting methodology over an extended period of time."
And what those monthly specialty sleep numbers reveal, according to Anderson, was good news for the industry last year: "The numbers signal the emergence of significantly accelerating specialty segment growth throughout 2006. For the full year, specialty units grew 2.7%. However, the growth in Q4 was 4.2% and for the month of December, it was a stellar 9.6%. That momentum has continued into 2007 with Q1 reaching a very strong 7.3% unit growth rate."
Anderson also noted that specialty sleep's unit performance has consistently outpaced that of innerspring bedding. And he said that the average unit selling price for specialty bedding grew by 11.6% in 2006, double the growth rate for innerspring mattresses.
Anderson made those comments in response to questions from Furniture/Today.
Barometer check
Also responding to questions from the newspaper was Select Comfort. Asked if it agrees with ISPA that specialty sleep units declined last year, the company said in a statement: "The ISPA annual report is a solid and sound source of information about industry performance. Both the ISPA annual report and the Bedding Barometer show the non-innerspring category increasing share in 2006.
"And the March 2007 Bedding Barometer showed an increase in units in the non-innerspring category.
"Over time, we believe the Bedding Barometer is a more accurate source because the ISPA annual report collects data from hundreds of manufacturers, while the Bedding Barometer is a monthly report that includes only the top 19 U.S. producers."
Select Comfort says the annual report figures were affected in 2005 "by a large number of manufacturers trying to get into the 'specialty' market. The numbers in the current annual report indicate the smaller manufacturers with specialty sleep products negatively affected unit growth in 2006."
Both Tempur-Pedic and Select Comfort say specialty sleep remains on the ascent. "Consumers continue to demonstrate their preference for specialty bedding alternatives by purchasing them in greater and greater amounts every month," Anderson said. "Specialty bedding offers real benefits that consumers are willing to pay for."
| ISPA's mattress shipment numbers | ||||
|---|---|---|---|---|
| Dollar amounts in billions and units in thousands. Change is from previous year's amounts. | ||||
| Units | Change | Dollar value | Change | |
| Source: International Sleep Products Assn. annual report, 2006 | ||||
| Innerspring | ||||
| 2006 | 21,499 | -1.7% | $3.97 | 6.1% |
| 2005 | 21,870 | 5.2% | 3.74 | 13.3% |
| Non-innerspring | ||||
| 2006 | 2,110 | -0.2% | $1.15 | 12.2% |
| 2005 | 2,115 | 24.5% | 1.03 | 29.2% |
