The Forecast: store sales
From the HGO Merchandiser
Even before the onset of the pandemic, the number of furniture stores operating in Canada has been shrinking steadily for most of the past decade. According to data published by both Industry Canada and Statistics Canada, there were an estimated 3,268 furniture stores across the country at the end of 2019. Seven years earlier there were 3,437. For the most part, the evidence suggests most of those lost were single unit operators.
Despite this shrinkage in numbers, furniture store sales improved modestly but steadily from $9.53 billion in 2012 to a record $12.0 billion last year. This has also driven sales for the average furniture store – which Statistics Canada defines as a retailer generating 51% or more of annual revenue from the sale of furniture and mattresses – from $2.77 million in 2012 to $3.67 million in 2019.
In 2019, the furniture store segment of Canadian retail was dominated by four players whose combined total sales of $6.7 billion accounted to a market share of roughly 56%. In all, they operated a combined 626 outlets from coast-to-coast, just over 19% of all brick-and-mortar Canadian furniture stores. Three of these companies are publicly held, while the fourth is the Canadian subsidiary of what is believed to be the world’s largest furniture and home furnishings retailer. They are:
Leon’s Furniture Limited (LFL): this Toronto-based publicly held operator of Leon’s, The Brick and Appliance Canada had sales for $2.73 billion and a 22.7% national market share in 2019, generated by some 304 corporate and franchise stores.
IKEA Canada: headquartered in Burlington, Ontario and owned by the global home furnishings giant based in The Netherlands, its 14 full-size stores had revenues of $2.53 billion during the fiscal year ending August 31, 2019 for a 22.0% market share.
BMTC Group: this Montreal-based and publicly held retailer operates solely in Quebec with 32 stores under the Brault & Martineau, EconoMax and Ameublements Tanguay banners, ringing up sales of $720.2 million and a 6.0% national market share for its last fiscal year; and,
Sleep Country Canada Holdings (SCC): also based in Toronto, the publicly held owner of mattress specialists Sleep Country, Dormez-Vous and Endy ended 2019 with revenue of $712.4 million out 275 stores plus its endy.ca virtual platform for a 5.9% market share.
Of the four, only SCC is aggressively adding to its store count at present, opening 12 new locations last year. For the three others, store counts have been remarkably stable over the past few years, although IKEA added new full-size stores in Halifax and Quebec City in 2017 and 2018, respectively. It also shelved plans to build another full-size store in London, Ontario earlier this year. It should be noted, LFL and BMTC have been continuously investing in their real estate, both have been relocating and renovating a number of their stores in recent years.
By contrast, the four largest furniture stores in the United States had collective sales of US$14.7 billion last year but with only a 26% share of that country’s market, according to Furniture Today. They also operated 3,845 brick-and-mortar stores between them, making them substantially larger than the entire Canadian furniture store sector in terms of both sales volume and unit count.
Statistics Canada includes furniture stores as one of 11 segments its uses to track the performance of location-based – brick-and-mortar – retail in Canada. There are two other types of retailers in the big-ticket home group, home furnishings stores and electronics/appliance stores. Home furnishings stores sell everything from floor covering to lamps and lighting, linens, decorative accessories and wall art as well as furniture, particularly accent and occasional furniture.