Demand for furniture is forecast to increase in line with consumer spending.
New York, NY (PRWEB) September 28, 2014
The Furniture Stores industry is expected to continue its slow recovery from the recession over the five years to 2014. Prior to 2010, furniture stores experienced a dramatic decline in demand when the housing market crashed. “Industry revenue rebounded gradually after 2010 as consumers gained more confidence in the economy,” according to IBISWorld Industry Analyst Will McKitterick. Rising consumer sentiment and per capita discretionary spending encouraged individuals to resume purchases of big-ticket home goods, including furniture. As a result, industry revenue is expected to grow by 0.9% to $55.8 billion in 2014. Nevertheless, falling home ownership, a primary driver of home goods sales, has stifled the industry even as furniture sales have slowly increased. The industry's recovery has been slower than previously anticipated, growing at an average annual rate of only 1.6% during the five years to 2014.
The industry is highly fragmented, with no one company controlling a commanding market share. Most operators are small, privately run businesses with fewer than nine employees per establishment. “Companies of this size were hit hard during the fallout of the recession, when reduced demand forced many operators to leave the industry,” says McKitterick. While rising revenue and margins encouraged new operators to enter the industry in 2012, the lingering effects of the recession led to consolidation over the period; the number of industry companies is estimated to contract an annualized 0.6% to 32,779 in 2014.
Higher disposable income and strong consumer sentiment will help drive furniture purchases over the five years to 2019. Furthermore, rising homeownership rates will encourage consumers to purchase more household goods, including furniture. 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 anticipated revenue growth. External competition will motivate many operators to improve customer service, brand awareness and financing capabilities to differentiate traditional furniture stores from their rising competitors.
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. 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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