Demand for furniture is forecast to increase in line with consumer spending
New York, NY (PRWEB) December 26, 2013
The Furniture Stores industry is expected to continue its ascent, after some setbacks during the five years to 2013. Rising consumer sentiment and growth in per capita disposable income will encourage consumers to return to spending on household items in 2013. However, prior to 2010, furniture stores experienced a harsh drop in demand as Americans' confidence in the economy fell, resulting in reduced consumer spending. Like most retailers of household goods, furniture stores experienced growth in demand before 2008, while the economy was booming. When the economic recession began, however, demand dramatically declined. Fortunately, in 2010, sales started to gradually pick up as consumers gained more confidence in the economy. This renewal, coupled with a recovering economy, will help revenue rise in 2013, following significant growth in 2012. However, the recessionary impact of lower homeownership rates, limited disposable income and strong external competition negatively affected the industry. As a result, companies had to change their business models and revenue consequently stagnated, during the five years to 2013.
The Furniture Stores industry is highly fragmented. Most industry operators do not account for more than 5.0% of market share. IKEA has grown its market share over the past several years as consumers have opted for more affordable furniture. Other operators in the industry include La-Z-Boy, Raymour & Flanigan Furniture, The Bombay Company, Haverty Furniture Companies and Select Comfort Corporation (see IBISWorld report 44211 for major player market shares). The top four players are estimated to account for more than 10.0% of the total industry concentration. Moreover, market share increased as a result of companies that sought to cope with revenue loss from mergers and acquisitions in the five years to 2013. Also, concentration is not expected to change significantly in the five years to 2018. In addition, many of the larger companies will concentrate on existing store improvements to recover sales and profitability.
During the five years to 2018, According to IBISWorld Industry Ananlyst Kerry Coughlin, “higher disposable income and strong consumer sentiment will help drive furniture demand.” Additionally, as homeownership rises, residents will purchase more household goods. At the same time, industry competition from other outlets, such as department stores and mass merchandisers, will continue to grow, which will squeeze profit margins and offset some of the forecast revenue growth. “This external competition will motivate many companies to improve customer service, brand awareness and financing capabilities in order to differentiate themselves from external players,” says Coughlin. Consequently, in the five years to 2018, industry revenue is projected to grow.
For more information, visit IBISWorld’s Furniture Stores Industry in the US industry report page.
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IBISWorld industry Report Key Topics
Operators in the Furniture Stores industry primarily sell household, outdoor and office furniture, except those sold in combination with office supplies and equipment. This industry predominantly markets living room, dining room and bedroom furniture, followed by demand for upholstered furniture. Desks and home office goods, lamps, recliners, rugs and outdoor furniture make up the rest of sales.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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