The year 2024 proved challenging for furniture retailers, though there are signs of cautious optimism for 2025. Many industry leaders are hopeful that the post-election surge in business will continue, provided that interest rates decrease and the housing market improves, allowing more inventory to flow into the market. However, uncertainties such as potential tariff impacts could lead to price increases, prompting consumers to postpone non-essential purchases. As a result, the general sentiment for the upcoming year is one of cautious optimism.
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Oscar Miskelly, CEO of Miskelly Furniture, a Top 100 retailer, noted, 'I feel we're in a good spot right now serving the home consumer. They want to enhance their homes, and I think we're in a good position to do that as an industry.' Miskelly acknowledged that 2024 was more challenging than anticipated, largely due to prolonged inflation and delayed interest rate cuts, which constrained business growth throughout the year.
Jeff Seaman, CEO of Rooms To Go, echoed similar concerns, adding, 'Business right now, post-election, is very good. Most of '24 was fairly soft. Since the election, it's been fairly strong.' Seaman highlighted November as a particularly strong month, raising hopes that momentum will carry into 2025.
Tony Boldt, CEO of NFM, part of Berkshire Hathaway's furniture division, also took a cautious approach at the start of 2024, given the uncertainty surrounding domestic and international conditions. 'We anticipated this year was going to be filled with economic uncertainty, which carried over to the consumer," Boldt said. "Combining geopolitical issues being heightened with inflation concerns, we expected consumer spending to be on the conservative side, and that's what we've seen.'
Despite the challenges, there have been notable success stories. Slumberland, a Top 100 retailer, expects to finish 2024 ahead of its performance in 2023, positioning itself well for 2025. Jill Byrnes, Vice President of Marketing at Slumberland, remarked, 'We're cautiously optimistic going into this year and felt we had a strong mix of inventory and execution. We're up this year. We're up for the year, and we're feeling strongly about our performance overall.' Byrnes emphasised that Slumberland's category mix is strong, with high conversion rates and increased customer engagement.
Looking ahead to 2025, Byrnes believes Slumberland is well-positioned to build on its momentum. 'We feel incredibly well-positioned with our mix of strong national brands. We cross a lot of the value spectrum that customers are looking for. We have incredibly sharply priced furniture and mattresses, and customers see the value. We can also lift customers into the better and best levels as well,' she said.
Miskelly expressed hope that some pent-up demand from the COVID-19 period will be realised in 2025. He noted, 'It seems the economic people I listen to, and I try to listen to several, think we're not going to see a big up tick before the third or fourth quarter. We're optimistic about next year. When we set our budgets for next year, we're planning for growth.'
Boldt stressed the importance of focusing on controllable factors, especially in light of inflation concerns. 'Customers are seeking incredible value, and that is what we are focused on delivering. People come to us as a brand they can trust during tough economic times. We want to ensure they see the value we provide to our respective communities,' he said.
Seaman, similarly, is optimistic about the prospects for 2025, provided that mortgage rates ease. 'I'm pretty bullish for '25. The only wrinkle is mortgage rates. I expected they would start easing. The vibe right now is strong. If it lasts, '25 will be better than '24,' he said.
When it comes to tariffs, Seaman believes that retailers are more prepared now than before. 'There was the big increase in tariffs a couple of years ago for China, which created somewhat of a shift,' he said. 'I think when the tariffs are imposed will be the time to make decisions. Until then, it's hard to make a rational decision on where to source, other than source the U.S. first, which we already try to do. Other than that, it's going to be wait and see.'
Byrnes added, 'I think any retailer or business that purchases goods from overseas is going to be concerned about tariffs. You have to be aware of the possibility. We have strategies we're talking about to mitigate any risks that come with strong tariffs.'
In conclusion, despite the uncertainties of 2024, furniture retailers remain cautiously optimistic about 2025. They are prepared to adjust to potential challenges and remain focused on delivering value to their customers.
Source: www.furnituretoday.com