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Furniture store sales fall 2.5%

 4 February 2019     Michael J. Knell 

OTTAWA – Reflecting the slowdown in the housing market, furniture store sales fell 2.5% in November 2018 on a year-over-year basis, according to the latest figures published by Statistics Canada. Actual sales also declined for home furnishings stores and electronics and appliance stores, suggesting both categories will probably experience some weakness during the critical 2018 Holiday Season.

The federal bean counter reported furniture stores at a preliminary and actual (that is, not seasonally adjusted) $1.02 billion for November 2018 – down 2.5% from the $1.04 billion rung-up for November 2017.

However, it was an improvement from the $926.9 million recorded in October 2018.

Furniture store sales for the year-to-date were essentially unchanged at $10.4 billion – another indication the growth rate for these merchants were slow drastically in 2018, after experiencing reasonable upticks in the 4.4% range in the previous four years.

In his analysis, the Toronto-based retail observer and consultant Ed Strapagiel noted for the three-month period ending in November, furniture store sales were down 3.2% while the trailing figure of $11.5 billion for the 12 months also ending in November is also off the pace recorded earlier this year.

Meanwhile, sales for home furnishings stores – which sell everything from floor covering to lamps and lighting, decorative accessories and wall art as well as accent and occasional furniture – were pegged at a preliminary $674.6 million for November. While down 4% from $702.4 million in November 2017, it was the highest monthly tally for these retailers in several months.

Sales for the year-to-date were estimated at $6.33 billion, up a scant 0.5% from the $6.30 billion rung-up for the comparable 11 months of the prior year.

For the three-month period, home furnishing store sales were off 1.3% although for the trailing 12 months they remain at the $7.0 billion mark.

Electronics and appliance stores rung-up preliminary sales of $1.77 billion in November. While that was the best month, to date, for sales in the second half of 2018, it was off 4.1% from the $1.85 billion sold in November 2017.

For the year-to-date, sales for these merchants were pegged at $14.5 billion, up 7.6% from the $13.5 for the same period of 2017.

While sales only advanced 1.1% for the three-month period ending in November, they advanced 9.1% for the trailing 12 months at $16.6 billion.

Big ticket home merchants should take consolation in the fact that retail as a whole had a lacklustre November. Statistics Canada said all location-based retail stores (brick and mortar), had preliminary and actual sales of $52.0 billion, just 0.6% off the pace set in November 2017.

Thanks to falling pump prices, gas station receipts were down 5.5% for the month while automotive dealers had essentially flat sales. Even allied retail groups, such as building supplies and garden centres showed sagging sales for the month.

The big winner for the month was the relatively new category ‘miscellaneous retail stores’ – which includes those selling cannabis – which showed an uptick over 12.5%.

For the year-to-date, all location-based retail had sales of $551.3 billion, 3% uptick over the comparable year.

The e-commerce effect
“Overall, e-commerce represented about 2.9% of total Canadian retail sales for the 12 months ending November 2018, including both pure play operators as well as the online operations of brick and mortar stores,” Strapagiel noted in his review, adding, “Canadian consumers, however, also buy online from foreign web sites which is not captured in these numbers.”

“Canadian e-commerce sales were up 18.6% year-over-year for the three months ending November 2018, but this is less than the 26.2% gain recorded in the same period a year ago,” he continued. “E-commerce retail sales gains are still in double digits and are still much higher than for location-based retail, but growth is slowing down.”

He also pointed out Statistics Canada divides e-commerce into two broad categories – one representing the e-commerce activities of brick and mortar retailers and the other being the so-called “pure play” e-commerce businesses, which are called ‘non-store retailers’. For the 12 months ending November 2018, these merchants had an estimated $10.4 billion in e-commerce sales. (These are not broken down by product category.)

For the 12 months ending November 2018, e-commerce sales by brick and mortar retailers were estimated at $7.5 billion.

That gives a grand total of $17.9 billion in e-commerce sales by Canadian operators over the year. “This does not include foreign e-commerce purchases made by Canadian consumers, but it does include e-commerce purchases made by foreigners at Canadian businesses,” Strapagiel said.

TempurPedic Canada
Stearns & Foster
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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Home Goods and its accompanying newsletter - HGO This Week - covers the furniture, bedding, appliances, consumer electronics, accessories, lamps and lighting and floor coverings product sectors of the big ticket home goods market in Canada. HGO is also a forum for the dissemination of market research and hard-hitting articles on best practices for Canadian retailers.

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