Close ratios and stock turns decrease; gross margin increases

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.

The best-selling price for a leather motion sofa increased 16.1% from a median of $1,549 to $1,799; prices for casual dining increased 5.6% to a median of $949; and the best-selling leather sectional sofa, the most expensive item on the floor, rose 2.7% to a median of $3,799.

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.

Efficiency measures


Gross margin percentage 46.5%
Stock turns 4.0 X
Close ratio 22%
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
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RSA Insights & Intelligence gives you, the retail sales associates, critical intelligence and insights. We make it easier for you to sell by providing actionable tips and key takeaways you can and should use for every sale. Check out our latest two articles:
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