Close ratios and stock turns decrease; gross margin increases
November 29, 2016,
Furniture store efficiency measures are a mixed bag this year. The customer close ratio inched downward from 25% last year to 22% in 2016, and stock turns decreased from a median of 4.3 times to a median of 4 times this year. Meanwhile, the gross margin increased from 46% in 2015 to 46.5% in 2016, and the sales per square feet of selling space remained flat at $200.
Price points are also all over the board at retail. Median best-selling price points for 11 of the 27 furniture and accessory products tracked over the last two years remained the same, while nine decreased and seven increased.
Best-selling prices for a queen-sized mattress decreased 10.5% to a median of $849, while a formal dining table and six chairs slipped 12.5% to a median of $2,099.
The majority of paying customers this year, at 56%, used personal credit cards for their furniture purchases, while 20% of buyers paid by cash, checks or checks cards.
Private-label financing is offered by three-fourths of responding furniture stores, and nearly half offer second-look options. As far as sales transactions, 21% are through private-label financing, and 3% are on in-house credit.
With full-time furniture store salespeople, nearly half are compensated by commission only, while 21% are paid an hourly rate, plus a commission, and 17% are paid through a salary, plus a commission percentage.
|Gross margin percentage||46.5%|
|Stock turns||4.0 X|
|Customer buyers per sales employee per week||10|
|Percentage of customer returned goods||2%|
|Total number of hours store is open per week||64 hrs.|
|Average square feet of selling space||30,000|
|Sales per square foot of selling space||$200|