BRIGHTON, Ontario – In many ways, this may be the most educational issue of the Merchandiser we have published. After examining the race to the bottom, we ask a group of independent retailers to share with our readers the lessons learned from the pandemic. To cap things off, our resident guru of all things retail details success strategies to transform your team from informed to committed.

That’s all in the now available Spring 2021 edition of the HGO Merchandiser.

For as long as I have been writing about the furniture, mattress and appliance industry, everyone from store owners to manufacturers have complained about the ‘race to the bottom’ when it comes to pricing. In some ways, the issue has always been treated like urban myth – everyone thinks it’s true but there really wasn’t a lot of evidence to support the contention.

One popular observation was the key retail price point for a three-seat stationary fabric covered sofa hadn’t moved in 30 years while the price of the typical family car had at the very least quadrupled over that time.

A few weeks ago, I took a closer look at the annual Consumer Price Index published by Statistics Canada and discovered prices for upholstery, case goods, mattresses, refrigerators and laundry equipment have been declining over the past couple of decades.

After consulting with a few really smart people, from both inside and outside the industry, we discovered there are reasons to explain this phenomenon, reasons we explore later in this issue. And some of those reasons will be somewhat surprising. For example, although most of us see the housing market as ‘hot’ at this precise moment, when looked at over the past 20 years some say it peaked in 2004 and has been declining slowly since then. Others note this industry is remarkably stable, particularly at retail which means competition has been increasingly price oriented as the merchant’s fear of losing market share became greater than his desire to improve margins.

Donald Cooper believes the best strategy to get the team from informed to committed is communication. By that he doesn’t mean telling people what to do and when. It’s about engagement and clarity. What’s more, it’s about listening to the best resource every business – the people who work there.

In this issue we also asked a small group in independent retailers from across the country to answer two apparently straightforward questions about their experiences over the past year or so. We asked them: what have you learned from the pandemic, both as a businessperson and as a human person; and how has it changed your business, your approach to business and how you see its future?

The answers they gave are worth reading. In many cases, they are downright inspirational. They also reminded me that this industry is populated with many fine human beings. I hope you enjoy reading this issue as much as I enjoyed writing it.

LAS VEGAS – Approximately 28 Canadian furniture, home furnishings and giftware resources are expected to open their doors at the World Market Center here for the Spring 2021 edition of the Las Vegas Market when it starts its normal five-day run this Sunday (April 11, 2021).

Normally, this edition of the twice-yearly trade event is held during the last week of January but was delayed until April because of restrictions imposed by various levels of government – both within and without the United States – to combat the COVID-19 pandemic.

At press time, the organizers said it was unclear how many of the permanent showrooms within the 31 floors of World Market Center would open for market. It should be noted that the Government of Canada has closed this country’s border with the United States for what it deems as ‘non-essential travel’ and they aren’t expected to be re-opened until at least the end of May. Canadian retailers wishing to attend the spring market are advised to contact Global Affairs Canada before making travel arrangements.

The last ‘normal’ edition of the Las Vegas Market was the Winter 2020 event held about 16 months which saw some 50 Canadian companies exhibit.

Among the names missing from the Spring 2021 roster of exhibitors are Stylus, Made-to-Order Sofas, the Vancouver-based contemporary upholstery specialist. Also missing from the list is casual dining powerhouse Canadel, case goods resource CDI Furniture, and outdoor furniture specialists Ratana and Corriveau.

The market is divided into three broad categories: furniture (including upholstery, case goods, mattresses and related products and services sold both by and to furniture retailers; home décor (mainly accessories such as mirrors, lamps, area rugs); and giftware. The event attracts retailers in all three categories as well as interior designers.

According to the organizers, the following furniture producers are expected to show at the Spring 2021 edition of the Las Vegas Market (their showrooms are identified where known): 

• CabinetBed – B220-12
• Decor-Rest Furniture – A554
• Flair Enterprises/Flair Furniture – A1000
• Magnussen Home – A730
• Mobital
• Palliser Furniture – B1001
• Prepac Manufacturing – B705
• Primo International – C1412
• Reemka – B350
• Sealy Sofa Convertibles – B1028
• Streamline Art – B346
• Sunpan Modern Home – B700
• Tailbase – B1050
• XSENSOR Technology – C1579

The following are listed as home décor exhibitors: 

• Elite Home Theater Seating – A238
• Giftcraft – C639, C644
• LH Imports – C485
• Mood Dekor – B365
• RENWIL – A425
• Vertuu Design – B365 

The following are listed in the gift category. It should be noted that most companies in this category are located in Building ‘C’ of the World Market Center: 

• Buddha Board Inc
• Green Import – C974
• Hape – C1097
• Kitras Art Glass – C1106
• Metallic Evolution – C1106
• Option 2 / Walpert / Silver Tree – C799
• Pixie Mood
• Torre & Tagus – C156

The Spring 2021 edition of the Las Vegas Market will run from April 11 to 15. The showrooms will be open Sunday to Wednesday from 8am until 6pm and will close at 4pm on the last day of market.

OTTAWA – Lockdowns imposed at the start of Boxing Week in various parts of the country to combat the spread of COVID-19 drove furniture store sales down just over 10% on a year-over-year basis in January, according to the latest figures from Statistics Canada. Home furnishing stores also saw a setback to start the year, although January electronics and appliance stores slid over the $1 billion for first time.

The national bean counter’s Monthly Retail Trade Survey (MRTS) set furniture store sales at a preliminary and actual $786.4 million for January 2021. That was 31.7% below the $1.15 billion sold in December 2020 and 10.1% off the $874.7 million sold in January 2020.

It should be noted Statistics Canada’s MRTS focuses some 11 categories of location-based or brick-and-mortar retail. The survey includes such well known firms as The Brick, Leon’s, IKEA Canada, Sleep Country, Brault & Martineau and Bad Boy to name a few. While the figures in this survey include e-commerce sales by these merchants, they don’t include sales by the pure e-commerce players such as Wayfair, Article, Rove Concepts, Goodmorning.com, Casper and others.

In his analysis, the Toronto-based retail consultant Ed Strapagiel noted brick-and-mortar furniture store sales for the trailing 12 months ending January 2021 were $11.6 billion, down from $11.9 billion for the same period ending January 2020 and falling back to where they were at the end of January 2019.

Meanwhile, sales by brick-and-mortar home furnishings stores – which sell everything from floor covering to lamps and lighting, decorative accessories and accent furniture – had preliminary and actual sales of $448.1 million in January, plummeting 44.3% from the prior month’s $803.6 and down 5.4% from the $473.6 million rung-up in January 2020.

Strapagiel reported these retailers had sales of $6.4 billion for the trailing 12 months ending this past January 30, down significantly from the $7.1 billion for the comparable period a year prior and the $7.0 billion for 12 months ending January 2019.

Electronics/appliance stores was one of the very few categories to record a year-over-year sales bump in January. Their actual and preliminary sales for the first month of 2021 were set at $1.0 billion, which while practically half of the $1.97 billion rung-up in December, was 2.4% higher than the $977.3 million sold in January 2020.

The other location-based retail sectors recording year-over-year gains in January were either food stores, pharmacies or building supply stores.

White and brown goods stores recorded sales of $14.9 billion for the trailing 12 months ending in January – some 8% higher than the $13.8 billion for the same period a year ago, although its down from the $15.3 billion for the trailing 12 months ending January 2019.

When ask how he would describe the performance of furniture, home furnishings and electronics/appliance stores to the rest of location-based retail, Strapagiel told Home Goods Online, “in the middle of the pack, more or less. Not as good as food stores, but not as bad as clothing & accessories or automobile dealers.”

Currently, Statistics Canada doesn’t track the performance of the pure e-commerce players such as Wayfair, Article or Goodmorning.com – although a spokesman for the agency recently told HGO they are planning to include these players in their coverage sometime over the next year or so – but Strapagiel is of the view they are growing and may even be taking some market share away from brick-and-mortar. “But the effect may not be too large,” he said, pointing out, “Many established retailers already had e-commerce efforts going, particularly in electronics. Large furniture and major appliances are difficult to sell online due to shipping issues.”

He also acknowledges the ravages imposed by the pandemic have been felt by furniture, furnishings and appliance retailers but, at this point, they are difficult to assess and may not be a severe as believed. “We’ll never know for sure because we don’t know what sales would have been without the pandemic. However, it seems to me that everything is moving more to e-commerce, and COVID has just moved up the schedule.”

But the pandemic will definitely play a role over the coming months. “Due to vaccinations, COVID will abate in the next six to 12 months and things will open up a lot more,” Strapagiel told HGO. “The key factor will be how well brick-and-mortar operations take advantage of the opportunity. But the rules have changed and there’s no going back to normal.”

OTTAWA – The Conference Board of Canada’s Index of Consumer Confidence (ICC) picked up 14.1 points in March, it’s largest monthly increase since last June when in rose following the end of the first round of pandemic-related closures. In fact, the board said the index now sits at 87% of its pre-pandemic level.

The index was set at 105.2 in March. It was set to 100 in 2014 and was 120.6 when the COVID-19 pandemic was declared at the end of February 2020.

In a statement, the board said the latest survey revealed that with lockdown measures being lifted and vaccines being rolled out, Canadians were much more optimistic about the future in March. More than 25% of survey respondents believe there will be more jobs six months from now, a historic high share of optimism on that question.

Consumers also felt more satisfied with their finances in March, likely stemming from the recent improvement in the labour market as well as the extension of the Canada Recovery Benefit from 26 weeks to 38 weeks. Only 21.7% of respondents expressed pessimism about their current finances.

“As we head into spring, consumer confidence in Canada is on the rebound,” conference board economist Anna Feng said. “People feel more confident about their current finances and future job prospects than at any time in more than six months. The positive sentiment should, hopefully, carry forward as we head into the second half of this year.”

She also noted as sentiments improved on finances and job prospects, Canadians were more confident about making a major purchase in March. Close to 24% of respondents believe now is a good time to make a major purchase, the highest level within the past year. This improvement in consumer confidence should help support a recovery of consumer spending.

While the national index climbed, so did each of the regional ones that make up the monthly study conducted by the Conference Board of Canada’s economic forecasting group.

Atlantic Canada: The index in this region rebounded 21.5 points in March, following two consecutive months of decline. The share of optimistic views on the major purchases question logged the largest increase in March, on the back of improving sentiments about future job prospects and current finances. However, the Atlantic region continues to fall behind the recovery pace of other regions, with the index sitting at only 74.5% of its pre-pandemic level in March. Consumers in the region worried the most about future financial conditions. Only 11.7% of survey respondents believe their finances will be better off six months from now, the lowest share of optimism across regions.

Quebec: Quebec’s index pushed higher (up 9.7 points) for the third consecutive month. With most regions in the province starting to move from the red zone to a less strict orange zone, the future seems promising for Quebecers. Consumers in the province are particularly optimistic about their future job prospects, leading to the province having the highest share of positive responses (32%) among regions. Nevertheless, consumers still worry about their finances, both current and future, as sentiments on these two questions deteriorated. As a result, Quebec is the only province that recorded rising pessimism on the major purchases question. More than 50% of respondents believe now is a bad time to make a major purchase, the highest share of negative views among provinces.

Ontario: Ontario’s index rose 12.4 points in March, reaching 92% of its pre-pandemic level. As the province gradually moves out of lockdown, Ontarians feel more optimistic about their future job prospects and finances. However, consumer sentiments on current financial condition stalled, with the positive share of responses remaining at 13.6%. This weighed on Ontarian’s confidence in making major purchases. With less than 20% of respondents believing now is a good time to make a major purchase, Ontario has the question’s lowest share of optimistic views.

Manitoba and Saskatchewan: Consumer confidence in the Manitoba-Saskatchewan region rose 12.1 points in March, reaching around 85% of its pre-pandemic level. Consumers in the region are more confident about their finances but also more anxious about future job prospects. This is the only region where the optimism level on the question of future employment stalled. On a positive note, the advancement of sentiments on both current and future finances supported consumers’ confidence in making major purchases.

Alberta: The Alberta index jumped 6.7 points in March, offsetting its 6.3-point loss last month. With oil prices ramping up in early March, Albertans are significantly more confident about their future job prospects. The share of optimism on future employment reached a 39-month high of 23.8%. However, consumer sentiments on current finances worsened. Around one-third of survey respondents think their current financial situation is worse than six months ago, the highest share of pessimism across regions. Concerns over finances weighed on sentiments about  major purchases as Alberta logged the smallest improvement in positive views on that question.

British Columbia: The index in British Columbia soared 32.1 points in March, the largest monthly gain among Canadian provinces. British Columbians are less cautious about making a major purchase this month, as the province has the lowest share of pessimistic views (38.6) on the question. The confidence in purchases is supported by improved sentiments on future employment and current finances. Around 28% of respondents believe there will be more jobs six months from now, the second-highest share of optimism across regions.