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Consumer spending up on furniture and mattresses in Q3

 17 February 2016     Michael J. Knell 

OTTAWA – Canadian consumer spending on furniture, mattresses and home furnishings climbed for the fourth consecutive year during the third quarter of 2015, according to new figures from Statistics Canada. And what’s more, furniture and home furnishings stores remain their preferred platforms from which to buy.

The agency’s Retail Commodity Survey measures how much consumers spend on certain commodities. When it comes to big ticket home goods it measures indoor furniture, mattresses, major appliances, televisions and audio/visual equipment and home furnishings – which covers everything from floor covering to lamps and lighting, decorative accessories and wall art.

It also measures these same commodity sales by type of merchant, such as furniture and home furnishings stores (in other reports, it separates these two categories); electronics and appliance stores; and, general merchandise stores (GMS), which includes department and other large format stores. The reported figures also include sales taxes, which vary from province to province, but average 13% across the country.

When reporting by store type, it’s a summary of all sales of all product commodities. So, for furniture and home furnishings stores, this includes sales of furniture, mattresses, major appliances and everything else these merchants sell.

In the third quarter of 2015, consumer spending in Canadian furniture and home furnishings stores (FHFS) totalled $4.49 billion, a gain of 4.7% over the $4.28 billion they spent in the third quarter of 2014. These stores accounted for 3.3% of all consumer spending in the country during the third quarter – a level that has remained fairly constant in recent years.

For the year-to-date ending October 31, consumer spending in FHFS totaled $12.1 billion, a 5.4% gain over the $11.5 billion sold for the comparable period in 2014. Once again, these merchants accounted for 3.2% of all consumer spending in Canada.

Indeed, FHFS spending outpaced total consumer spending which grew at a slower pace 2.1% to reach $379.9 billion.

Consumer spending on furniture climbed 7.6% in the third quarter to $2.02 billion, compared to $1.88 billion for the same period of 2014. FHFS continue to be the consumers’ first choice for their furniture buying as sales through these merchants climbed 9.2% to $1.67 billion.

FHFS merchants continue to account for about 83% of all furniture sales in Canada.

For the year-to-date, total furniture spending climbed 7.6% to $5.4 billion. Spending at FHFS rose 10% to $4.44 billion while furniture spending at general merchandise stores fell 5.3% to $558.5 million.

While growing, it should also be noted that in a separate report, Statistics Canada said furniture accounted for less than 1% of all e-commerce sales through 2014.

Also turning in a strong performance was the mattress category where total spending for the third quarter was up 10.8% to $521.1 million – compared to $470.1 million for the same period of 2014. Once again, FHFS continued to dominate the category, accounting for 90.2% of consumer spending which was valued at $470.4 million for the quarter, up 11.4% year-over-year.

For the year-to-date, spending was up 6.7% to $1.34 billion. FHFS spending was up 7.6% at $1.2 billion. In fact, the amount sold through other retail channels was so small, Statistics Canada declined to publish them.

It was the remaining three major product groups – major appliances; televisions and audio/visual equipment; and, home furnishings – that proved to a performance drag for most Canadian furniture and home furnishings stores.

Consumer spending on major appliances fell 1.3% on the third quarter to $1.22 billion. Spending in FHFS fell 8.1% to $408.4 million. However, these merchants maintained their typical market share of about 34% for white goods.

While electronics and appliance stores saw consumer spending on major appliances rise a modest 2.6% to $513.3 million for the quarter, general merchandise stores saw spending fall 3.8% to $175.8 million.

For the year-to-date, consumer spending on white goods advanced a slight 1.0% to $3.36 billion. However, spending in FHFS fell 8.2% to $1.12 billion. Spending in electronics stores was up 6.3% to $1.45 billion while spending in general merchandise stores was up 1.4% to $468.8 million.

Televisions and audio/visual equipment continued to suffer from consumer neglect and falling ticket prices throughout 2015. Spending on this sub-set of the consumer electronics category fell 8.6% in the third quarter to $760.1 million.

Spending on this product type in FHFS dropped 17.4% to $63.6 million. It also fell by 8.4% for electronics stores to $435.8 million and by 10.8% for general merchandise stores to $198.7 million.

For the year-to-date, consumer spending fell 8.2% to $2.16 billion. FHFS suffered a decline of 8.4% to $181.8 million. Electronic stores lost 17.4% to $1.26 billion and general merchandise stores saw spending fall 9.1% to $551.0 million.

Consumer spending on home furnishings – which cover everything from floor covering to lamps and lighting, decorative accessories and wall art – fell 1.3% for the third quarter to $2.47 billion. Spending at FHFS was essentially flat at $1.14 billion while spending at general merchandise stores fell 3.5% to $656.4 million.

For the year-to-date, consumer spending on home furnishings was up 1.1% to $6.87 billion. Spending on this category at FHFS was up a substantially better 2.9% to $3.15 billion while it fell 2.5% for general merchandise stores to $1.81 billion.  FHFS maintained their traditional 46% share of the home furnishings market in this country.

It’s interesting to note that furniture, mattresses, major appliances, televisions and home furnishings only accounted for 83.4% of consumer spending in Canadian furniture and home furnishings stores during the first nine months of 2015. Consumers spent another $2.01 billion in these stores – about 16.6% of the $12.1 billion they spent in total – on products and services other than the traditional five big ticket categories.


Zucora
TempurPedic Canada
This HGO article was written by:
Michael J. Knell
Michael J. Knell

Michael is the publisher and editor of Home Goods Online. A seasoned business journalist, he has researched and written about the furniture, mattress and major appliance industries in both Canada and the United States for the past three decades.


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