Demand for furniture is forecast to increase in line with consumer spending.
Los Angeles, CA (PRWEB) September 07, 2013
The Furniture Stores industry is expected to continue picking up speed in 2013, 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 this year. Prior to 2010, though, 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, demand declined. Fortunately, in 2010, sales started to gradually pick up as consumers gained more confidence in the economy. These changes and a recovering economy will help revenue rise 2.1% in 2013 to $64.6 billion, following growth of 3.4% in 2012. Nevertheless, during the recession, lower homeownership rates, limited disposable income and strong external competition negatively impacted the industry. As a result, firms have changed their business models. During the five years to 2013, revenue stagnated at an estimated average rate of 0.0% per year.
The industry is highly fragmented. Many companies are private businesses with fewer than nine employees in each store. According to IBISWorld industry analyst Natalie Everett, “The number of store locations is anticipated to increase at a slower rate than industry enterprises, as many larger companies will concentrate improvement efforts on existing stores, to help their profitability and location, before opening new outlets.”
During the five years to 2018, higher disposable income and strong consumer sentiment will help boost furniture demand. As homeownership rises, homeowners 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, squeezing profit margins and offsetting some of the forecast revenue growth,” says Everett. This external competition will motivate many firms to improve their customer service, brand awareness and financing capabilities to differentiate themselves from external players.
For more information, visit IBISWorld’s Furniture Stores 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. Sales of living room, dining room and bedroom furniture dominate the industry, followed by demand for upholstered furniture. Desks and home office goods, lamps, recliners, rugs and outdoor furniture make up the rest of sales.
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