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Retailers divided on promoting Made in USA

Clint Engel -- Furniture Today, November 5, 2011

FORT LAUDERDALE, Fla. - Changing market conditions and consumer needs are prompting retailers to pay close attention to where products are made.
     Keith Koenig, president of Fort Lauderdale, Fla.-based City Furniture, said Made in America is becoming more important to the Top 100 company, which is buying more U.S. goods as the costs associated with doing business with overseas suppliers continue to rise.
     But Koenig, like some other retailers, said he hasn't heavily promoted the The new Lola sectional is made in the North Carolina factory of Fairmont Designs.American-made angle "because it's a global economy," he said.
     "If we accentuate part of the product line I'm a little nervous" that it might turn off some customers to imported goods - which are still a big part of City's product lineup, said Koenig.
     Still, economics could dictate that City will stock more U.S.-sourced goods in the future, he thinks.
     "I've been over to China four times this year," he said. "All of our vendors are clear about the fact that costs are going to go up, how labor is going to go up."
     He said the Chinese government wants wages to double over the next five years. Koenig said he expects what happens in China will influence all of Asia, and this is on top of pressure on China to let its currency appreciate further against the U.S. dollar, which would make Chinese goods more expensive here.
     "I think there's going to be more and more of a tendency to buy in the U.S., based on economics," Koenig said. He added that he's already seeing well-executed blended strategies from suppliers such as Idea Italia, which is offering great value by using U.S. labor to assemble products while it sources raw materials and finished parts of case goods globally.
     Mark Mueller, general manager of Mueller Furniture in Belleville, Ill., said Made in America is "incredibly important" to the store - "one, because it's important to my customers, but two, because I believe in it too."
     Mueller said he takes pride in being able to tell customers an upscale upholstered piece is made in Lebanon, Mo., by Justice Furniture; a solid cherry dining room they're interested in is made in Memphis, Tenn., by Oakwood Inds.; or a chair by Best Home Furnishings and a bedroom by Mobel are produced in Ferdinand, Ind.
     And there often is a strong value story to go along with the Made in America message. Mueller said it's convenient for customers when they can buy a $1,500 solid wood bedroom from Vaughan-Bassett and get delivery in two weeks.
     "That sells," he said, "and that's at a lower price point."
     Mueller also has had initial success with Amish furniture. His father recently attended an all-American furniture market in Lancaster, Pa., and picked up a couple of Amish lines there - furniture that's "not your grandparents' Amish," he said, but instead features up-to-date styling and finishes that appeal to consumers in the Midwest.
     Jeff Child, president of Salt Lake City-based R.C. Willey Home Furnishings, said his company is behind U.S.-made goods - to a point.
     "We'd rather buy Made in America furniture both for logistics reasons and because it's where we live, and we like to support people who are trying to create jobs here," Child said.
     But while the Made in America theme also is becoming more important to consumers, he's not sure it's to a point where most feel bad about buying imports. Imported goods are everywhere, he noted - in our closets and on our driveways. People are used to them.
     R.C. Willey does play up its domestic sourcing with signage, particularly in the case goods category because most of the Berkshire Hathaway-owned retailer's fabric upholstery is and has been domestically made for some time. It's the case goods where the shift back to U.S. sourcing is more noticeable.
     In case goods, the retailer has done particularly well with domestic sources such as Thornwood, Daniel's Amish and some local Utah-based suppliers.
     U.S. goods are probably more competitive in pricing than they were five years ago, he added, but he's not sure retailers or consumers are getting as big a bang for their buck yet from domestic goods as they do with many imported lines. And while a small percentage of consumers will choose domestic no matter what, consumers likely won't be able to find what they're looking for if they narrow their shopping list down to strictly domestic names.
     Lee Goodman, president and CEO Jerome's in San Diego, said Made in America isn't important to Jerome's or its customers.
     "We're not seeing that at all," he said. "We're seeing what's important is that they buy from a company they can trust and they get a price that screams value. That's really how we've been able to maintain our success in these tough times."

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