Mattresses stay mighty
From the HGO Merchandiser
The mattress business had a pretty good year in 2017. Retail sales were up for the sixth consecutive year and set a new record, breaching the $2 billion mark for the first time, according to the latest preliminary figures published by Statistics Canada and its Retail Commodity Survey. That was up 4.6% up from the $1.97 billion in mattress sales rung up the previous year.
Furniture and home furnishings stores continue to dominate the category, having accounted for 89.2% of sales or $1.84 billion last year – up 3.1% on a year-over-year basis. Unfortunately, mattress specialty stores – such as Mattress Mattress or Mattress Mart – are not tracked separately and are included with furniture and home furnishings stores.
Statistics Canada also monitors the performance of what it calls the Group of Large Retailers (GLR). These are the 80 largest retailers in the country and include such familiar names as Leon’s Furniture, The Brick, Brault & Martineau, Hudson’s Bay, IKEA, Canadian Tire and, until its demise this past January, Sears Canada. However, the federal bean counter did add Sleep Country Canada (SCC) to the GLR’s roster last year.
That addition probably accounts for big jump in GLR mattress sales, which climbed to $1.27 billion in 2017 from $866.3 million in 2016 – a leap of 46.4%. Its market share jumped from 44.0% to 61.5%.
Not to be outdone, SCC saw its mattress sales jump to $474.6 million last year – a 12.9% gain over the 2016 giving the publicly-held sleep specialist a 23.0% market share, up from the prior year’s 21.3%. The company’s total revenue last year was $588.0 million.
Unfortunately, the commodity survey doesn’t include the fast growing e-commerce channel which has been getting more and more crowded in this country over the past couple of years. All of the players are privately held and reliable sales estimates are difficult to discern. However, if their collective share is consistent with those of other product categories, an estimate in the $40 to $50 million range is not unreasonable although their annualised rate of growth believed to be much higher than conventional brick and mortar retailers.
“My impression is the industry doesn’t have much of a clue about what they are doing,” observed Steve Amis, vice president of sales and marketing for Springwall Sleep Products. The reason is simple, the e-commerce players don’t source their product assortment from the big mattress manufacturers in North America.
The apparent market
Not to be outdone, mattress resources also had a decent 2017 as the apparent market (the value of domestic shipments, less exports plus imports priced at wholesale – that is, before retail mark-ups) was up 8.1% to $1.13 billion.
Domestic shipments were up for the third consecutive year, climbing 5.5% to $934.7 million. Unfortunately, that’s still well below the high water mark of $987.6 million set in 2007, the year before the financial markets went sideways sending most of the world’s economies into a recession that many haven’t quite fully recovered from. It should also be noted domestic shipments include mattresses made not only for the residential/retail market but for the hospitality, health care and institutional markets as well – which are believed to account for about 8% of the total.
Until 2008, mattresses weren’t a big commodity in international trade. Imports into Canada – which were up 19.7% to $239.6 million last year – have been outpacing domestic production for the past several years and have been the biggest driver in the growth of the apparent market.
Imports from the United States were valued at $121.9 million last year, up 13.5% over the year prior. While exact figures aren’t known, most insiders believe much of growth in U.S. imports can be attributed to the expansion of the Tempur-Pedic brand in the Canadian market over the past several years. The specialty foam product is only manufactured in the U.S. although it is sold by Tempur Sealy Canada, a wholly-owned branch of its Kentucky-based parent company.
Mattress imports from the People’s Republic of China are also growing and were valued at $60.3 million in 2017. The emerging player on the Canadian mattress is Mexico, whose sales to retailers in this country climbed 10.6% to $46.3 million. Industry insiders believe almost all of this is sold to one retailer – IKEA Canada.
The most significant change in the apparent market has been in the share owned by the imports. In 2007, imports accounted for 9.0% of the apparent market for mattresses in Canada. Last year, it has more than doubled to 21.2%.