Floor & Window Coverings Retail Industry Trends

Slow Comparable Store Sales Growth

Declining prices have made it more difficult for chains to grow sales at existing stores. Comparable store sales at the major chains have grown only 5 percent or less over the past several years, forcing them to rely on new store openings to achieve double-digit growth in overall sales. To attract repeat visits to existing stores, companies are expanding product lines, changing merchandising formats more frequently, and offering customer loyalty programs.

Major Chain Expansion

Home furnishings chains like Bed Bath & Beyond, Linens 'n Things, and Williams-Sonoma are opening new stores and aggressively expanding existing stores to maintain revenue growth. Bed Bath & Beyond opened over 80 new stores in 2005, while Linens 'n Things added 50. Williams-Sonoma plans to open 28 new stores in 2006, and expand or remodel 22.

Direct-to-Consumer Sales

Many home furnishings retailers are selling directly to consumers via the Internet and catalog sales, in addition to their "bricks and mortar” stores. Williams-Sonoma does over 40 percent of its sales directly to consumers. Online and catalog sales provide 24 hour shopping convenience for busy consumers.

Celebrity Licensing

As home furnishings become more fashion-oriented, retailers and manufacturers are increasingly using celebrities in product branding and advertising. Martha Stewart helped initiate the use of celebrity branding, but it's expanded to include fashion models, clothing designers, and celebrity chefs.

Supplier Consolidation

Some product categories of home furnishings have had significant consolidation as manufacturers merge or go out of business. Dinnerware suppliers became even more highly concentrated with the recent acquisition of Royal Doulton by Waterford Wedgewood. Reduced membership due to industry consolidation was key in the dissolution of the National Tabletop and Giftware Association.