New Consumer Goods market report from Euromonitor International: "Home Furnishings in the US"
Boston, MA -- (SBWIRE) -- 08/21/2014 -- From 2007-2009, value sales of home furnishings fell sharply. For a category which had seen value sales grow consistently since 1999, the recession in the US created a perfect storm. First, retail purchases of home furnishings are closely tied to consumer confidence, which was devastated by the financial crisis and the resulting economic turmoil. At the same time, the housing market - which is also closely tied to consumer spending on home furnishings - was perhaps the part of the US economy most severely harmed by the recession. Finally, access to credit dried up as a result of the financial crisis. As many indoor furniture items are very expensive, consumers often rely on credit for such purchases. All of these factors worked to lead retail value sales of home furnishings to fall by 15% between 2007 and 2009. Moving forwards, however, retail sales of home furnishings rebounded, growing by 8% between 2009 and 2012.
The category, however, is still well below the pre-recessionary level in terms of overall size in value terms at constant 2013 prices, and in 2013 growth momentum appears to have slowed slightly, with 2% growth in value sales seen during the year.
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Ashley Furniture Industries is the leading player in home furnishings, accounting for a value share of 5% in 2013, a share that has been steadily growing since 2009. In addition to selling its products wholesale to a wide range of independently-owned furniture stores, the Ashley name is licensed to a range of Ashley Furniture HomeStores. These independently-owned stores sell a wide range of Ashley brand furniture products, and it is the largest furniture speciality chain in the US. This strong distribution reach contributes to Ashley's success, as well as to high and growing levels of brand equity. Despite Ashley's leading position, home furnishings in the US is highly fragmented, as the next two largest players, Tempur Sealy and IKEA Holdings, held 3% and 2% shares, respectively. This fragmentation extends into the retail landscape, where thousands of family-operated furniture stores compete for customers.
Moving forward, retail sales of home furnishings are expected maintain relatively consistent growth, increasing by a CAGR of 1% in value sales at constant 2013 prices over the forecast period to reach US$132.8 billion by 2018. Economic recovery is expected to reduce the unemployment rate, generate GDP growth and strengthen the housing market, all of which should have a beneficial effect on sales of home furnishings. The economic performance and consumer confidence are especially important in indoor furniture, in which high unit prices mean that consumers view such purchases as a large investment which must be weighed carefully. For this reason, retail sales of indoor furniture suffered the most during the recession, falling by 14% in current value terms between 2007 and 2009. As the economic situation improves during the forecast period, the category is therefore likely to have very strong growth potential.