Rumblings of a Home furnishing downturn
There have been some rumblings of late that the home furnishing market is facing a bit of a downturn. This may be the case. Both Pier 1 and Cost Plus have seen their same-store sales dip. It is also believed that the home furnishing industry market is dependent upon the home market, which itself has been seeing a bit of a downturn.
However, there are still several reasons to support a rosier view of the home furnishings market. To encourage people not to jump to conclusions based on the sales figures of Peir 1 and Cost Plus, lets look at the reasons the home furnishing industry might be doing better than the rumblers say.
The Housing Market Has Cooled
While it is often believed that the state of the housing market partly determines the state of the home furnishings market, I beg to differ. In many situations these two markets may indeed be correlated. When people buy a new house, they may find that they need various new furniture. However, when times are tighter and the housing market isn’t very good, people stay home more. Generally individuals like to spend money on the places where they spend their time. Thus by causing people to spend more time at home, a downturn in the economy could have a built in counter-balance against a downturn in the home furnishing industry.
Target’s sales are up
It is important not to overstate the meaning of this number because Target sells a lot more than just furniture. However, a healthy Target does seem to be a sign that the ‘durable household goods’ market is doing well.
Explaining Cost Plus & Pier 1
Instead of a general downturn in home furnishings, these numbers might show something that has been building for some time. Many middle class consumers are starting to shy away from the middle priced home furnishing market. They are looking to the cheap goods and the very high quality goods. As this trend continues, one could easily see the numbers of middle market retailers decrease.
Conclusion
Keep in mind that these points do not support a predicted upturn in the home furnishings market. However, it does counter some of the recent rumblings about a fall in the home furnishings market. These points do supports the old-sounding saying “limited numbers do not a good prediction make.”