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If you survived the past decade, congratulations
I recently had the honor of speaking to the Nationwide Marketing Group's early March PrimeTime meeting. This was especially flattering since I had spoken to this group before. I feel like anyone can be invited to speak but to be invited to speak again is the compliment.
This was a record meeting for Nationwide with more than 5,000 dealer/members and vendors in attendance in Las Vegas. Before addressing my view of the future, the economy and (do I dare say it?) Washington, I thought I would give my congratulations to all the retailers and vendors in the audience. Why? Considering what we have all shared over the last five years, we are truly winners or at least survivors.
Only five years ago, existing home sales dropped 53%, new home sales collapsed by 80%, unemployment more than doubled, in full panic the banks stopped lending and American consumers stopped spending wherever they could. Let's face it, the home furnishings industry is largely dependent upon housing turnover, consumer attitudes (and employment) and credit to finance our customers' purchases. All three were sucker punched.
The worst post-World War II recession, 1982, had home furnishings sales decline about 7%. This time furniture sales dropped about 17% and mattress sales for a while ran 22% below year earlier levels.
Of course, our government stepped in with debt-forgiving bailouts for the auto industry plus the infamous "cash for clunkers," while housing received the $8,000 tax credit for first-time home buyers, helping these industries move excess inventory. Our industry got jack squat.
In the past 10 years, the Furniture/Today Top 100 furniture store list lost Levitz, Wickes, Breuners, Lack's, Benchmark, Homestead House and 29 others.
Meanwhile, many of our leading furniture brands continued opening their single-branded stores, often keeping independent stores from using their brand power.
Over the last decade, the largest 100 stores went from having 50% of the furniture store revenue to 59%, and growing non-furniture store retailers like mass merchants, clubs, rental, catalogs, Internet and others grew to 42% of all furniture and mattresses sold from 36% a decade earlier.
By our measure, the high end declined from 14% of home furnishings sales to 9%, and imports of wood and upholstered furniture grew to 73% and 42% of total U.S. sales, respectively, from 48% and 17%, all over the last decade. Our statistics show that the aggregate dollar sales of smaller furniture stores is 56% below where it was in 2002. Of course, furniture prices over this time declined 14% while all consumer expenditure pricing rose 22%.
Bottom line? Congratulations on surviving to enjoy what well could be a most exciting and promising decade for our industry.