Bedding industry faces year of contrasts in '06

Bedding's crystal ball for 2006 is a bit cloudy. As the industry peers into the swirling mists of uncertainty, it sees a number of negatives. Those, as usual, are balanced by some positives.

Add it all up and you’ve got a year that will produce a slight gain in bedding units of 0.2%, but a sizable 7.4% gain in the dollar volume of bedding shipments, according to Furniture/Today’s Consensus Bedding Forecast.
So is this crystal ball, to mix metaphors here, half full or half empty?

My politically correct answer: It will clearly be a year of contrasts.

We have our work cut out for us on the unit side of the ledger. It is difficult to think that steadily rising bedding prices won’t, at some point, take their toll on consumers’ bedding purchases. The problem is not so much that prices are going up, since all (or virtually all) key bedding price points will continue to be covered, but that the values offered at those price points will be changing.

If producers and retailers can’t maintain strong value stories at high-volume price points, such as those from $499 to $699, then the industry could face a significant loss of volume, some producers assert.

Another issue is the possibility that we will lose some promotional hooks, such as the $299 queen set. While some say it wouldn’t be a bad thing if the industry abandons that price point, others say it has played a key role. Take out some of the promotional models, they say, and overall business could suffer.

On the dollar side of the ledger, higher prices due to escalating foam costs and the introduction of fire-resistant beds are a certainty. Our consensus forecast sees a 7.2 percentage point difference between unit and dollar performance next year, which would be one of the larger such gaps in the past decade. Inflation isn’t the only factor; the industry also is doing a better job of selling better beds.

Elsewhere in this issue, in our 2006 Bedding Outlook report, you’ll see the comments from bedding leaders that helped shape my thinking on these issues. Read the stories and make up your own mind. There are a great number of variables to plug into your forecast for business next year.

There are some certainties to point to as well. We have survived another challenging year of business and there are plenty of strong business plans in place for 2006.

For me personally, I’ve had another great year of working with the retailers, producers and suppliers who make up this great industry. In this final bedding column of the year, I thank you for your support in 2005, and

I wish you a happy holiday season. (to add public comments click on "Add your Comment" below, or to email Dave directly click here.)