Home Furnishings Stores

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 18,400 home furnishings retailers in the US sell housewares, tableware, giftware, décor, linens, lighting, floor coverings, and window treatments. Home furnishings include most home-related goods, but exclude furniture. Companies that specialize in general home furnishings account for 54% of industry revenue; floor coverings retailers are 43%; window treatment retailers are 3%.

Competition From Alternative Retailers

Home furnishings stores face competition from a variety of alternative retailers, including mass merchandisers, department stores, Internet-based and catalog retailers, outlet stores, and home shopping networks.

Demand Driven By Trends

The home furnishings market is influenced by trends and fads related to fashion.

Industry size & Structure

A typical home furnishings store operates out of a single location, employs about 11 workers, and generates $3 million annually.

    • The home furnishings retail industry consists of about 18,400 companies that employ about 205,800 workers and generate $56 billion annually.
    • Companies that specialize in general home furnishings account for 56% of industry revenue; floor coverings retailers are 41%; window treatment retailers are 3%.
    • The general home furnishings retailing segment of the industry is somewhat concentrated, with the top 20 firms accounting for 49% of sector sales. The floor covering and window treatment retailing industries are fragmented.
    • Large companies include CCA Global Partners (Carpet One, Flooring America), Bed Bath & Beyond, Williams-Sonoma, and Pier One.
                                    Industry Forecast
                                    Home Furnishings Stores Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Nov 17, 2022 - NRF: Holiday Spending to Hold Up Despite Inflation
                                    • Despite high inflation and rising interest rates, the National Retail Federation (NRF) expects consumer spending to remain resilient this holiday season. While the NRF acknowledges consumers are feeling the pinch of higher interest rates and inflation, it believes economic fundamentals – including job growth, rising wages, and savings accumulated during the pandemic - will sustain consumer spending. The NRF also points to US gross domestic product growth of 2.6% in the third quarter as evidence that the US economy hasn’t slipped into recession. The NRF forecasts holiday spending will rise between 6% and 8% over 2021 levels to reach between $942.6 billion and $960.4 billion. The outlook for 2022 is down from the 13.5% rise seen in 2021 but is better than the average 4.9% growth seen over the last decade.
                                    • Building permits, housing starts, and housing completions are indicators of future home furnishings demand. The number of building permits issued for privately-owned housing units decreased 2.4% month over month and declined 10.1 year over year in October 2022. Housing starts fell 4.2% month over month and decreased 8.8% year over year in October. Housing completions fell 6.4% month over month but rose 6.6% year over year in October.
                                    • High interest rates, elevated building materials prices, and a lack of affordable inventory pushed home builder sentiment lower in November, according to the National Association of Home Builders (NAHB). Homebuilder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), fell five points to 33 in November 2022 from 38 in October, marking the 11th consecutive monthly decline. Any HMI reading over 50 indicates more builders see conditions as good than poor. Amid weak buyer traffic, 37% of homebuilders reported cutting prices in November compared to 26% who reduced prices in September, according to the NAHB. A weaker housing market could reduce demand for home furnishing as people often buy new furniture after purchasing a home.
                                    • Online furniture and home goods retailer Wayfair saw its sales decline 9% year over year to $2.8 billion in Q3 2022, according to Retail Dive. In a recent press release, the firm announced that between Q2 and Q3, it lost about one million customers or about 4% of its total customer base. Early in the pandemic, Wayfair enjoyed strong growth as shoppers shifted to e-commerce and spent more on sprucing up their homes. More recently, consumers have pivoted back to in-person shopping. Additionally, many shoppers on Wayfair tend to make a lot of impulse purchases, which are among the first expenses to be cut during tough economic times, according to GlobalData.
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