Discounters: Some hold steady, others struggle
Carole Sloan -- Furniture Today, August 19, 2007
New York — Wal-Mart and Target continue to be the only discount department stores on Furniture/Today's Top 25 furniture and bedding ranking for 2006, maintaining their positions in the first and fourth slots.
Wal-Mart, the world's largest retailer, added 142 stores in 2006, mostly supercenters, which helped account for its 3.7% sales increase in furniture and bedding. The Bentonville, Ark.-based retailer had sales of $2.1 billion in furniture and bedding for 2006.
Minneapolis-based Target saw furniture and bedding sales increase at a slightly higher rate of 4% as it expanded its efforts in its stores and online. With 91 new stores, Target's furniture and bedding sales grew to $1.4 billion last year.
These two discount department stores accounted for 17% of the sales of the Top 25 furniture and bedding retailers, the same proportion as in 2005. Together, the two grew 3.9%, the second-smallest increase in the seven categories comprising the Top 25 rankings.
While not ranked among the Top 25, Kmart, Meijer and ShopKo make up the balance of the Top 5 discount department stores in furniture and bedding sales.
Kmart, now part of Sears Holdings, based in Hoffman Estates, Ill., has been in a major state of change, with the closing of 28 stores and the combining of its merchandise management with that of Sears.
In the past year, iconic Sears brands like Craftsman and Kenmore have been integrated into the Kmart mix.
Kmart still merchandises the Essentials brand, which includes furniture and Martha Stewart Everyday products. The company had a sales decline of 8.8% last year, lowering its furniture and bedding sales to $365 million.
In fourth place among the discount department stores, Grand Rapids, Mich.-based Meijer saw furniture and bedding sales increase 3.8% to $82 million. Last year, the supercenter-oriented discounter made a major foray into the highly competitive Chicago market.
ShopKo, based in Green Bay, Wis., swapped places with Meijer in the Top 5 discounter rankings. ShopKo, which included the Pamida chain until this year, underwent major management changes at the end of 2005. Those changes affected results in 2006, as furniture and bedding sales declined 2.5% to $78 million, while the store count stayed the same.
As a group, the Top 5 discount department stores had sales of $4 billion in furniture and bedding in 2006, up 2.4% from the previous year.
| Top 5 discount department stores | |||||||
|---|---|---|---|---|---|---|---|
| Rank | Estimated furniture and bedding sales in $ millions | Total number of units | |||||
| 2006 | 2005 | Company, home base, notes | 2006 | 2005 | Percent change 2005 to 2006 | 2006 | 2005 |
| 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 2006 and 2005 unless otherwise noted. Source: Furniture/Today market research |
|||||||
| 1 | 1 | Wal-Mart, Bentonville, Ark. | $2,080.0 | $2,005.0 | 3.7% | 3,331 | 3,189 |
| Fiscal year ended Jan 31. Sales and store counts are for U.S. stores only, including 1,075 discount and 2,256 supercenter stores and exclude Neighborhood Markets and Sam's Club. Also sells furniture and bedding online. Is currently testing a new home store set using lower center sidecounters intended to enhance its "room solutions" effort and the customer experience. Supercenters average 187,000 square feet and discount stores average 107,000 square feet. Hardgoods, including home furnishings, accounted for 18% of 2006 total sales, down from 19% in 2005. Total 2006 sales were $226.3 billion, up 7.8% from $209.9 billion in 2005. | |||||||
| 2 | 2 | Target, Minneapolis | $1,420.0 | $1,365.0 | 4.0% | 1,488 | 1,397 |
| Fiscal year ended Feb. 3. Also sells online at target.com. Furniture brands include Todd Oldham by La-Z-Boy, the Signature collection from Renovations, a division of Thomasville, the exclusive Furio RTA brand and Global Bazaar, the retailer's annual international home furnishings event. Expanded its online home furnishings presence last year, increasing offerings of upholstery, including leather, case goods, accent furniture, lamps, lighting and area rugs. Home furnishings and decor represented 19% of 2006 total sales, down from 20% in 2005. Comp store sales were 4.8% in 2006. Total 2006 sales were $57.9 million, up 12.9% from $51.3 billion in 2005. | |||||||
| 3 | 3 | Kmart, Hoffman Estates, Ill. | $365.0 | $400.0 | -8.8% | 1,388 | 1,416 |
| Fiscal year ended Feb 3. Part of publicly held Sears Holdings Corp. Merged with Sears to form one company in March 2005. At fiscal year end operated 1,333 discount stores and 55 supercenters in 49 states, Guam, Puerto Rico and the U.S. Virgin Islands. Also sells furniture online. Features its Essentials Home brand RTA line. Plans to remove Martha Stewart Everyday RTA and lawn and garden from its assortment. Closed a net of 28 store last year and remodeled about 200 stores, making them more customer friendly and easier to navigate. Referenced its roots of bluelight specials with the launch of a blue incandescent bulb, called Mr. Bluelight, to signal important promotions. Comp store sales declined 0.6% last year. Total 2006 sales were $18.6 billion, down 2.3% from $19.1 billion in 2005. | |||||||
| 4 | 5 | Meijer, Grand Rapids, Mich. | $82.0 | $79.0 | 3.8% | 176 | 171 |
| Family-owned and operated. Is recognized as the pioneer of the supercenter. Operates the majority of its stores in Michigan, with the balance in Illinois, Indiana, Kentucky and Ohio. All stores are opened 24 hours a day and average 225,000 square feet. Opened five supercenters in 2006 and plans to open five this year and seven in 2008. Currently operates 13 supercenters in metro Chicago. The company's new "green" store in Allen Park, Mich., will carry energy efficient fixtures, incorporate sustainable building components and feature indoor air quality monitoring, qualifying it for LEED certification. Total 2006 sales estimated at $14.1 billion. | |||||||
| 5 | 4 | ShopKo, Green Bay, Wis. | $78.0 | $80.0 | -2.5% | 351 | 351 |
| Privately held. Taken private by investment firm Sun Capital Partners in December 2005. Sales and store counts are for 135 ShopKo stores in 13 Midwest and Northwest states and 216 Pamida stores in 15 Midwest, Pacific, Northwest and Western Mountain states. Figures exclude three ShopKo Express Rx stores in Wisconsin. ShopKo spun off the Pamida chain in March 2007. ShopKo stores average over 90,000 square feet. ShopKo closed two stores in Peoria, Ill., and one in Eugene, Ore., in January. Broke ground in May on a 80,000-sq.-ft. store in metro Green Bay, Wis., its first new store in six years. Total 2006 sales estimated at $2.2 billion. | |||||||
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