• Powell Slaughter

TD Bank Vegas survey shows optimism

HIGH POINT – Inventory restraints and decreased consumer demand are the biggest challenges facing furniture, according to a TD Bank survey of 104 retailers attending the recent Las Vegas Market.

That said, the survey showed that 75% of respondents said their business either met or exceeded expectations for the first half of 2017 and that 72% expect furniture purchasing volume to remain steady or increase in the second half of 2017.

Additionally, nearly 82% of executives polled are expecting their employee base to grow or remain the same over the next six months, with only 12% expecting to make cuts.

TD Bank has utilized the past several furniture markets in Las Vegas and High Point for such surveys. Mike Rittler, head of retail card services, said this latest survey jumped out for its overall sense of optimism.

“It seems a higher percentage of respondents said business met or exceed expectations for the first half,” he said. “The results were a little better than we expected, and that optimism carries into the future.”

Thirty-eight percent of surveyed retailers identified inventory restraints as the biggest challenge to their business. One-third cited decreased consumer demand, and 30% named technology disruption as a risk.

Twenty-three percent are concerned about rising interest rates, while 21% worry about rising employee wage requirements. Regulation is an issue for 20%, and 6% cited cybercrime as a risk.

Of retailers surveyed, 43% indicated that customers ages 35-54-years old are the biggest age group to seek financing options. Thirty percent of respondents said the 18- to 34-years age range is their most important group looking for financing.

That older group has remained consistent throughout the TD surveys, but the younger consumer segment saw a significant increase this time around.

“For that generation, the Millennials if you will, this is a new thing to think about, financing and credit for purchases,” Rittler said. “It’s on their minds now, and their presence really jumped up.”

Still, 18% of the surveyed retailers don’t offer financing.

“I was a little surprised by that,” Rittler said. Considering the number of custom and generic financing programs available to retailers, “I was surprised that almost 20% of the people we talked to didn’t see the value of financing … given the availability of programs out there and the opportunity to close more sales.”

The majority of respondents, 53%, reported their company’s annual revenue between $500,001 and $5 million; 33% less than $500,000; and 13% more than $5 million.

Powell SlaughterPowell Slaughter | Senior Editor
PSlaughter@furnituretoday.com

I'm Powell Slaughter, senior editor at Furniture/Today. I returned to the publication in January 2015 after nine years of writing about furniture retail strategies and best practices at a monthly magazine focusing on home furnishings retail operations. Prior to that, I spent 10 years with F/T covering wood furniture, the last five of those as case goods editor. While I cover occasional, home entertainment and home office here, a major responsibility is expanding our attention to the logistics side of the industry. I hope my articles will encourage a dialogue with retailers, vendors, third-party logistics specialists and carriers. I’d love to hear your ideas, concerns and suggestions for smoother flow of material and goods.

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