by Monthly and year-over-year gains are tempered by slow year-to-date sales activity
WASHINGTON, D.C. — For a change, there was some good news for the furniture industry worth noting in the latest retail sales report released by the U.S. Department of Commerce last week.
For one, the sector’s 2.4% year-over-year decline was the smallest decrease in more than 16 months based on updated figures in the DOC’s database.
Secondly, furniture stores suffered a much smaller decline than sporting goods, hobby, musical instrument and bookstores, where sales fell 6.8% compared with July 2023. Not to disparage any other segment, but it’s nice to see the category faring a little better after coming in last place for months on end.
And third, it saw sales rise .5% over June, which placed it in the ranks of growth segments that included the following: motor vehicle and parts dealers, up 3.6% for the month; building material and garden equipment and supplies dealers and grocery stores, each up .9%; health and beauty stores, up .8%; general merchandise stores including department stores, up .5%; restaurants and bars, up .3%; non-store retailers including e-commerce sites and catalog businesses, up .2%; and gasoline stations, up .1%.
Those sectors seeing declines from June were clothing and clothing accessories stores, down .1%; sporting goods, hobby, musical instrument and bookstores, down .7%; and miscellaneous store retailers, including pet stores and religious supply stores, down 2.5%.
It’s a good sign to see furniture make a comeback, even if the year-over-year numbers were down. The fact that it also had a larger monthly increase than traditionally higher growth segments such as restaurants and bars and e-commerce businesses offers some cause for celebration.
Yet, based on year-to-date figures the DOC has published over the past two months, the furniture sector still has trailed other areas of consumer spending.
For example, for the first six months, furniture store sales were down 7%, by far the sharpest decline on the list, followed by building equipment and garden equipment and supplies dealers, down 3.5%; sporting goods, hobby, musical instrument and bookstores, down 3.2%; and gasoline stations, down .9%.
The biggest growth sectors over the first six months were non-store retailers, including e-commerce businesses and catalogs, up 8.5%; restaurants and bars, up 6%; miscellaneous store retailers, up 5.3%; general merchandise stores including department stores, up 3.3%; clothing and clothing accessories stores, up 2.9%; food and beverage stores, up 1.9%; health and beauty stores, up 1.4%; motor vehicle and parts dealers, up 1.3%; and electronics and appliance stores, up .8%.
Overall retail sales were up 2.8% during the first six months.
For the first seven months, the small monthly gain didn’t do much to improve furniture’s place on the list. It had a year-to-date decrease of 6.2%, compared with an 8.8% increase for non-store retailers, a 5.4% increase for miscellaneous store retailers such as pet stores and religious supply stores and a 5.3% increase for restaurants and bars.
Every other segment on the list except sporting goods, hobby, musical instrument and bookstores (down 3.5%), building material and garden equipment and supplies dealers (down 2.3%) and gasoline stations (down .6%) saw an increase in the low- to mid-single digits, with overall retail sales up 2.9% for the period.
It’s also worth noting that the furniture store sales figures are relatively small in comparison with other areas of consumer spending. For example, during the first seven months, furniture retailers reported $75.5 billion in sales. While higher than electronics and appliance store sales of $51.3 billion and sporting goods, hobby, musical instrument and bookstore sales of $53.5 billion, it’s significantly lower than motor vehicle and parts sales of $938.1 billion; non-store retailer sales of $816.9 billion; restaurant and bar sales of $661.6 billion; grocery store sales of $572.9 billion; and general merchandise store sales of $507.9 billion.
These were followed by gasoline purchases of $371.6 billion; building material and garden equipment and supplies sales of $286.5 billion; health and beauty store sales of $252.5 billion; clothing and clothing accessories store sales of $168.2 billion; and miscellaneous store sales of $104.2 billion.
Obviously, this data shows that the furniture sector is competing with a host of needs and non-discretionary items ranging from food and clothing to health care (prescriptions and other medicines) and gassing up the vehicle for work and other travel. But there are also some discretionary purchases in there, too, such as dining out and purchases of garden and building supplies for a host of home improvement projects.
Should furniture rank higher on the list of spending? In many cases, the numbers show that for many consumers, it’s a want versus an immediate need. But for those that haven’t replaced their furniture in years if not decades, we suggest it’s a need. Hopefully those consumers will continue to boost their spending on furniture and other types of home furnishings in the months ahead.
