First quarter was lame, but future looks better
Let's face it, the March quarter stunk. Higher withholding taxes, lower tax refunds, the much discussed and misunderstood sequestration and rising gas prices all impacted the American consumer.
There are times when it is good to be selling big ticket, credit-sensitive durable goods like furniture and mattresses, but the first quarter of 2013 was not one of those times.
Adding to the misery was that the first quarter of 2012 was last year's best quarter. In 2012, the retail sales of furniture and mattresses in the March quarter grew 6.6% while this year's quarter declined 0.3%. Just to refresh your memory, in the March quarter of 2012 domestic mattress factory shipments grew a dramatic 19.2%. In this year's March quarter, domestic mattress shipments declined 3.3%. Nuts.
Wood furniture in the March quarter had mixed results with domestic shipments down 2.7% while imports grew 4.7%. In order of size, wood furniture imports from China grew 5.1%, from Vietnam 10.4% and from Canada 4.4%. As of the March quarter, imports were 69% of all household wood furniture sold in the U.S., up from 67.2% in 2012's first quarter.
Upholstered furniture did better than wood in the March quarter, as it has for most of the past six years.
U.S.-made upholstered furniture grew 1.3% while imports grew 12.7%, bringing imports to 40% of all household upholstered furniture sold in the U.S. in the March quarter, up from 37.4% for last year's first quarter.
Just under 75% of all imported upholstered furniture came from China in the March quarter, and its shipments grew 14.8%. Imported upholstery from Mexico was up 6%, Vietnam up 13.7% and Canada up 0.4%, representing 5.3%, 4.8% and 4.5% of all imported upholstery, respectively.
As mentioned earlier, domestic mattress shipments declined 3.3% in the March quarter but imported mattresses grew 9.3%. Even so, imported mattresses were only 5.8% of all mattresses sold in the U.S. in the quarter, up from 5.2% a year ago.
So what is the good news? In 2012, home furnishings sales started strong then slowed.
All indications are that in 2013, our worst quarter is now past. April was stronger, and Memorial Day helped May improve.
With housing sales strong, we should get a seasonal bounce this year beginning in late summer.
Plan for a stronger autumn selling season. Our time may be coming soon.