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A peek inside furniture store operations

September 23, 2010

Many changes have occurred with the economy, consumers and retail operations over the last year. Furniture/Today, takes a look inside furniture store operations in its latest Furniture Store Performance Report survey, presented in this week's print issue, to give the industry an idea of how things are progressing and what opportunities remain ahead.

What did we find? Overall, furniture retailers are working hard to stay at or above water. With consumers' altered shopping habits, furniture stores are staying open a little longer to try to reach all potential customers. The result: sales per sales employee grew more than 10% over the year.

Merchandise sales accounted for the largest chunk of revenues last year while finance and credit income grabbed the next largest share of revenues-though a distant second.

The credit CARD reform act, effective in February of this year, had a great affect on furniture retailers over the one year time-period. Meant to help consumers, the CARD reform act had many retailers working to change and implement new advertising strategies to appeal to their customers without breaking the new rules. However, whether it is via "no-no-no" advertising or traditional financing advertising, deferred financing is a trend that will continue.

Lastly, the Internet has become an advertising vehicle for many furniture retailers. In particular, 32% and 19%, respectively, of furniture stores are engaged in Facebook and Twitter social media sites. These types of social media allow retailers to reach customers on a more intimate level and in turn provide their customers more information about their store and store's web site. And this has, no doubt, given furniture stores a new avenue for customers to drive and hopefully shop.

Below are key efficiency measures for furniture retailers. Take a look and see how your store measures up.

Efficiency measures



Gross margin percentage
Return on sales
Stock turns
Close ratio
Number of customers visiting store in average week
Purchasers per sales employees per week
Size of average transaction
Total number of hours store is open per week
56 hrs.
Sales per sales employee
Percentage of gross square footage devoted to selling space

Average square feet of selling space
 25,000 sq. ft.
Sales per square foot of selling space

Source: Furniture/Today's Furniture Store Performance Report, 2010