TD Bank: Furniture Retailers Less Bullish on Sales
May 15, 2017,
WILMINGTON, Del.—Furniture retailers are less optimistic about sales increases for the second quarter of 2017 after highly positive sales predictions previously, according to a TD Bank survey taken during High Point Market last month.
When asked about furniture purchasing expectations for the April through June quarter this year, 52 percent of the 101 furniture retailer respondents said furniture purchases would increase and 43 percent called for steady sales. But when a similar question was posed to 109 furniture retailers and distributors at the Furniture Today Leadership Conference in November 2016, nearly 80 percent of respondents said furniture purchasing would increase. And at the previous High Point Market in October 2016, about 69 percent noted furniture sales would increase in 2017.
Mike Rittler, head of retail card services for TD Bank, said while respondents were bullish on where things were going in the 2016 surveys, 2017 is starting out on a more cautious note.
Another question, having to do with credit promotional finance programs, revealed that 60 percent of the 2017 High Point retailer respondents find such programs to be important to their business, with 34 percent saying it was extremely important and 26 percent rating it moderately important. Rittler said that isn’t surprising given that furniture is a major purchase for most consumers, and having a deferred interest program or an equal payment over time program makes managing such purchases easier.
Furniture retailers were also asked about the impact of the recent interest rate hike and although most (65 percent) said it wouldn’t impact sales in the second quarter, Rittler said he believes rate increases “will be part of the story. The current hike hasn’t had an impact,” he said, “but it may down the road.”
On the issue of rewards programs, the majority of the furniture retailers (55 percent) surveyed at High Point this year said they don’t currently offer a rewards program and among those that do, discounts on future purchases lead the list at 35 percent, followed by extended warranties (25 percent) in-store credit (18 percent), access to promotional coupons (17 percent) and cash back (5 percent). Noting the big ticket but less frequent purchase nature with furniture buying, Rittler said reward programs wouldn’t be as big a driver as flexible payments.
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