June represented a new month for furniture retailers to tell what’s becoming the same old story: New orders for the month experienced a 6 percent decline from orders in June of 2018 – the fifth consecutive month this year for falling orders.
The numbers come from accounting and consulting firm Smith Leonard. The company’s Furniture Insights surveys residential furniture manufacturers and distributors.
June’s drop is steeper than the 3 percent decline in May but is better than the 9 percent drop in April. Year-to-date, new orders are off 3 percent compared to the same period in 2018 with 70 percent of survey participants reporting lower orders than the same six-month period last year.
Smith Leonard Partner Ken Smith compiles the survey. He says there’s no getting around a five-month slide. “We hate to sound like we are repeating ourselves, but for the most part, most of the residential furniture business from the domestic manufacturers and distributors has been sluggish at best,” says Smith. “While 2018 was a decent growth year that followed several years of increased business, five straight months of declining incoming business is a concern.”
Shipments slide 4 percent
New orders aren’t the only sign of a cautious consumer. June shipments fell 4 percent from the same month last year. That might not seem significant but 67 percent of participants reported lower shipments compared to 58 percent the previous year.
The economy remains strong. New and existing housing sales are up and the August Consumer Confidence report notes consumers remain “confident and willing to spend.” But Smith wonders if that confidence extends to buying furniture.
Smith is entertaining buying a new cellphone. He remembers when companies gave away phones just to lock customers into monthly phone service fees. Smith says those new phones and other tech gadgets might be reducing consumers’ spending for new furniture.
“We continue to wonder, with all the normal factors that seem to help furniture sales, why business is not better?” he says. “Maybe it really is that consumers are spending, but instead are choosing the gadgets and other tech items that seem more exciting and provide instant gratification. These purchases also do not require any remodeling or painting that sometimes accompany furniture purchases.”