Free Newsletter
By Joanne Friedrick, Research Editor
Furniture and bedding sales are estimated to reach nearly $120.4 billion this year, up 4.5% over 2020, driven in large part by a rebound in retailing despite the continuing pandemic. The 4.5% increase is the highest since 2012, when spending rose by the same year-over-year percentage.
According to Furniture Today and Easy Analytic Software Inc. (EASI) calculations, spending of furniture and bedding will grow at a rate of 20.8% over the next five years to top $145 billion by 2026.
While pandemic-related store closings took a toll in 2020, retailers entered 2021 with ample inventory and renewed enthusiasm from shoppers. However, supply chain issues that worsened throughout the year and rising inflation could impact spending and heighten uncertainty in late 2021 and into 2022.
Case in point: The Conference Board’s Consumer Confidence Index decreased in November, following an increase in October, dropping to 109.5 from 111.6. Additionally, the Present Situation Index, which measures consumers’ assessment of the business and labor markets, and the Expectations Index, an indicator of the short-term outlook for income, business and labor market conditions, also fell in November.
“Concerns about rising prices — and, to a lesser degree, the (COVID-19) Delta variant — were the primary drivers of the slight decline in confidence,” said Lynn Franco, senior director of economic indicators at The Conference Board.
Franco noted the number of consumers planning major purchases over the next six months has fallen. And, she added, while the board “expects this to be a good holiday season for retailers and confidence levels suggest the economic expansion will continue into early 2022, … both confidence and spending will likely face headwinds from rising prices and a potential resurgence of COVID-19 in the coming months.”
A look at retail indicators
E-commerce sales, another indicator of retailing health, took a hit in the third quarter, dropping by 3.3% from the second quarter to $214.6 billion on a seasonally adjusted basis. Total retail sales for the third quarter also fell by 1.1% compared with the second quarter, coming in at $1,648.6 billion.
However, third-quarter e-commerce sales were ahead of the same period last year by 6.6%, and seasonally adjusted retail sales were up by 13.1% over 2020’s third quarter. Third-quarter e-commerce sales accounted for 13% of total sales, down from 13.8% in the third quarter of 2020.
Meanwhile, the U.S. Census Bureau’s 10-month total for furniture and home furnishing store sales of approximately $119.1 billion (including categories beyond furniture and bedding) was up 29.1% over the same period in 2020, although October sales of about $12.2 billion were lower than those of August ($12.5 billion) and September ($12.4 billion), indicating a slight downward trend.
Feeling the impact
Other factors that can influence home furnishings sales going forward — the unemployment rate, wage growth and median income — have seen a mixture of changes.
Unemployment for October 2021 was 4.6%, down from 6.7% in November and December 2020. The rate has dropped nearly consistently over the past year, with just slight upticks in April and June.
Wage growth, also up from 2020, has moderated in recent months, growing by 9.77% in October vs. a high of 15.31% in April. Meanwhile, median household income dropped by 2.9% between 2019 and 2020, falling to $67,521, according to the U.S. Census Bureau.
Product getting attention
Using Furniture Today and EASI estimates for 2021, the bedding category, with $18.5 billion in sales, edged out stationary sofas at $18.4 billion for the top spot and saw the largest year-over-year increase, growing by 8.8%.
Both categories accounted for 15% of total furniture and bedding spending in 2021. Stationary sofas, which were up 5% in sales over 2020, are expected to see a greater growth rate over the next five years and could reclaim the lead.
Bedding, seating and outdoor furniture benefited from consumers’ focus on nesting and socially distanced entertaining during the pandemic. The outdoor furniture category grew by 4.8% to $5.23 billion in sales in 2021, putting it in the top three.
Other categories expected to see a significant growth over the next five years include curios, swivel/glider rockers, home office furniture, entertainment furniture and casual dining sets.
