• Clint Engel

Retailer Q&A: Are you seeing price increase at market, and how will you handle them back home?

Jeff Seaman
Rooms To Go, Seffner, Fla.
“Yes, we’re seeing them in living room. People are talking about them. They’re sensible not to give it immediately; they give the retailer time. But it’s good to (announce increases) at market because it’s more honest and gives us a chance to (adjust). And since you’re at market, you can change a lot, bring in new stuff. If you come back from market and then get a price increase, we’d never take it. (How we handle them) depends on how much they are. Often we absorb them. In some cases we have to raise the price, and in some cases we change the merchandise; it’s really one of three things. I’d say more than 50% of the time we’ll do something else. We hate to raise prices.”

Jake Jabs
American Furniture Warehouse, Englewood, Colo.
“Yes, we’re seeing them, and the amount varies. A lot of times you’ve got to take a price increase. For years I’ve heard: ‘They’re raising lumber, foam.’ And then you come to find out there really wasn’t a price raise. So I think it’s really a little bit of wait and see. But at the same time, factories have to make money. If it’s something we’re buying and they have to have small price increase, normally we’ll eat it. What we’re saying to them is keep it small enough so we can eat the price increase. (With) some factories we’ll OK a small price increase. A lot of times it’s like $5 a piece wholesale (on upholstery). In that case we’ll probably eat it. If we’re selling something for $399, we wouldn’t raise it to $405. Hopefully factories will keep it small, because if it’s very much, we’ll have to change our retail price and that … becomes a different negotiation and could take the product out of the hot-price (category). We just got back from China, and we had some (increases on the case goods side, too), although most of our factories in China did not give us any increase.”

Tim Harris
Knoxville Wholesale Furniture, Knoxville, Tenn.
“We’re really not seeing many. There may be some slight increases, but I don’t think it’s going to affect retail. We’ve seen a lot of new product this time, and it’s very encouraging. As a matter of fact, in categories like solid wood, we’ve seen price decreases. That category is getting very competitive, so really it hasn’t affected us at all. (The slight increases are) mainly on upholstery. In case goods there’s a lot of competition there, so I don’t think they will be able to raise the price much.”

Elaine Haskey
Steinhafels, Waukesha, Wis.
“Yes, we are seeing price increases. It’s usually the result of raw materials; I guess what’s happening is the foam producers are taking increases. And the other thing we’re hearing is that there’s competition for plywood (due to) hurricane rebuilding. I’m not sure how accurate that is, but we are seeing price increases. I can’t speak for case goods because I only do upholstery. We will use it as an opportunity to really look at our pricing and see if we’re priced correctly on things and where margin opportunities might exist. Where we might have been thinking of taking a slight retail price increase, this would just solidify that decision and allow us to move forward. It’s nothing we haven’t seen before. Nothing stays the same forever. It is a part of doing business.”

Fortson Turner
Turner Furniture, Tifton, Ga.
“Some, but not terribly. One of the last I saw a couple of weeks ago was in upholstery, but it’s not unusually (noticeable). I haven’t seen a lot of it. We would have to pass it on.”

Mickael Setlakwe
Setlakwe Furniture, Drummondville, Quebec
“Yes, we have seen price increases. We have seen some (in place) now and some that are coming … pretty much on everything … from 5% to 8%. And as for how we are going to handle them, I don’t think it will change our strategy. Yes, we will pass it on; we won’t lower our margins. To be honest, right now there’s has got to be inflation somehow. Wages are going up, everything is going up, so we need inflation in the furniture industry as well. It’s not a bad idea for prices to go up.”

Joe Beiter
Beiter’s Home Center, South Williamsport, Pa.
“We have not seen price increases, (and) we’ve been through 16 places. Actually I’ve probably gotten more discounts and incentives to buy stuff at market this year than I have in years past, probably because of business conditions. So I think the manufacturers are trying to buy floor spots.”

Eric Easter
Kittle’s, Indianapolis
“It depends. The price increases are not through the roof — five bucks here, a few bucks there. We’re seeing one to five (percent increases) and more closer to one than five, but it depends on price point. And it’s mostly in upholstery, although we have seen some in (case goods, too). We’ll absorb some. Some we may just go ahead and take (price) up, but nothing significant. We’ll just deal with it.”

Randy Coconis
Coconis Furniture, South Zanesville, Ohio
“I haven’t seen that many of them yet, but they’re all talking about them. They’re coming. They haven’t said how much. I think (suppliers) have had increases but know there are more coming, so they’re on hold until that settles down, and then they’ll make customers (aware.) I’m sure there are showrooms that have had them. But it’s so volatile right now; I think they’re waiting another few weeks to see where it ends up. They didn’t want to do a price increase and then have to do another one three weeks later. (If the increases come down the road, how we handle them) depends on the item and how competitive the item is. Sometimes price increases can be an advantage. It allows you to go up a price point (the way) you probably should have with the last price increase. Now you go up that $50 or $100, and you make money.”

Dru Jeppe
Reeds Furniture, Agoura Hills, Calif.
“We’re seeing them come through, not just this market, but before market. We’re looking at the retails and seeing if they can handle them or not because (some upholstery companies) they’re pushing price points up to the point where they’re tipping over the edge of an acceptable price for our guests right now. Right now (consumers) are pretty price sensitive. We try (to pass the increases on), but it’s to the point that I don’t know if our customers are going to accept it anymore. Last market is when we saw the first set ... mainly upholstery. We’re seeing 5% increases each time, and this is the second set of them. We’re turning over every rock, shopping other suppliers, other things we’ve never looked at before, different styles we haven’t looked at. Right now the market is changing so quickly. We’re trying to figure out the trends of what people are wanting. Price is definitely a big issue, and the increases aren’t helping at all.”

Rhonda Jones
Rhonda’s Furniture, Orrville, Ohio
“Yes, very slightly, 1% on motion and stationary upholstery and then a 1% to 2% increase from another company. We’re not sure yet until we look at it real close (whether or not we’ll pass it on to customers). It’s definitely (manageable). There is one company that hasn’t had a price increase in five years, and they’re increasing about 1%. That’s not going to have a big impact on our retail prices.”

Clint EngelClint Engel | Senior Retail Editor, Furniture Today
cengel@furnituretoday.com

Please feel free to email or call me with all of your retail news and tips, including expansion news, successful merchandising and marketing strategies and anything else you would like to see covered by Furniture/Today.  Contact me directly at cengel@furnituretoday.com or 336-605-1129.

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