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Hearth & Home February 2015

Positano deep-seating from Alfresco Home.

2014 Patio Retail Survey Report

By Richard Wright

Remodeling and sales of previously-owned homes provide a boost to an otherwise tepid market.

At the beginning of November, Hearth & Home sent a questionnaire to 1,380 patio retailers; a total of 143 were returned completed and usable.

It’s difficult to catch a break these days – at least if you’re a specialty retailer of outdoor products. Once more, sales of patio furnishings through that channel were in negative numbers.

However, as the following retailer comments show us, there are many factors impacting the industry that has yet to completely rebound from the downturn. They include new home starts and sales, the stagnant middle class, and the lack of discretionary income with those consumers who normally would be strong prospects.

That simply means that economic conditions are about to get better as we head into 2015 and a more robust housing market.

Through the Years

U.S. Sales of Patio Furnishings

Not everything is UP these days. Sales of patio furnishings through the specialty channel dropped three percent in 2014.

Retailer Comments

Survey respondents were asked to tell us about the economy in their area, particularly in the areas of new construction, employment, sales of new and previously-owned homes, consumer attitudes and discretionary spending.

Northeast

Connecticut: “Spending has remained cautious, but continues to show signs of improvement.”

Delaware: “Very careful spending, but consumers are buying better grades.”

Maine: “New construction up. Home sales up. Consumer attitudes getting better and spending more (gradually).”

Maryland: “Business is down due to the economic situation of many middle-class families. They are buying price point! New home sales are down and people are shopping the Internet for pricing. I’m also finding some of my vendors selling on the Internet. That also hurts business.”

Massachusetts: “It’s gotten better, the uber wealthy seem to be spending again.”

New Hampshire: “Everything seems to be loosening up. More construction projects starting. More renovation projects. Looks to be a good beginning to a new year.”

New York: “Home sales up slightly. Consumer attitudes up slightly. Overall a slight up-tic.”

Pennsylvania: “New construction is picking up. Best since 2008. Employment rate 5.5 percent. Existing home sales are up. Consumer spending is still tight. People seem to be looking at quality if price isn’t as important.”

Pennsylvania: “In this last year we have seen some increase in business development.”

Patio Furnishings Sales

2013 to 2014

The nine percent of patio furnishings retailers whose sales were down more than 15 percent from prior-year levels contrasts to the eight percent in this category two years ago. The 18 percent of retailers who were up more than 15 percent is only one point lower than two years ago.

South

Florida: “It has improved steadily since 2009.”

Kentucky: “Jobs improving. New construction up four percent. Sales of previously-owned homes up eight percent. Consumers’ attitudes improving.”

Louisiana: “Economy has increased. Building is up. Population has increased.”

Oklahoma: “New construction is up.”

Tennessee: “The economy has improved and our sales are up.”

Texas: “New home sales basically non-existent. Consumer spending down in my market by 10 percent. Construction nonexistent. Previously-owned home market spiked up. Consumer attitudes bearish, not good. Discretionary spending non-existent.”

West Virginia: “Morgantown is a growing college town. Sales have continually increased as people become more aware of our business, our consistency and the quality of our products.”

Regional Look at 2014 vs. 2013

The Midwest, West and Canada all had less than 50 percent of patio retailers reporting positive year-over-year sales results.

Midwest

Illinois: “Definitely spending more money.”

Kansas: “A lot of remodeling instead of new construction has been going on. People seem more focused on doing things that need to be fixed rather than adding new products to their home strictly for material purposes. People are trying to find the least expensive ways of vamping up their homes.”

Michigan: “Home sales are up. Economy is fair. Employment is up only in the resort areas of northern Michigan. We only have about a 115-day window to do 12 months of business – April 1 to July 15.”

Michigan: “Economy has vastly improved. Employment up. Housing market very good. BUT high to medium metal patio furniture is way down, with the exception of poly lumber, all-weather wicker and indoor rattan which had a 20 to 50 percent increase. This year we are eliminating several aluminum lines (also cast and wrought iron) and increasing primarily poly lumber.”

Missouri: “Things have loosened up. People are willing to spend money provided it’s a good value. Consumers are doing their research before shopping in a store. Consumer attitudes are much better. We’re seeing more home sales rather than new construction. Discretionary spending is still happening, just not crazy spending like we’ve seen in the past. Not as many impulse buys. Overall it’s been a really good year; we’re feeling positive about 2015.”

Nebraska: “Retail is steady, not growing much, less than 10 percent. Single-family housing permits are down 18 percent.”

Ohio: “Our customer base is directed to the well-to-do. New construction and high-end additions are important to our business. We have a conservative customer base. Election results were good for us.”

Wisconsin: “More really high-end sales. Bad economy for middle income, almost none. Home sales same as last year.”

Plan to Increase Early-buys

The percentage of specialty retailers who plan to increase the amount of their early-buys in 2015 dropped by 11 points.

West

Arizona: “It has improved substantially in pool construction and patio.”

California: “In our area, the economy has stayed flat.

The only increase we have seen is in the highest earners. Middle-income spending has decreased sharply (lower-income people shop at Box stores). The mid-level is disappearing.”

California: “Pools up 80 percent (new construction). Furniture up 14 percent. Spas up six percent. People are spending money again in the backyard. Years of pent-up demand has us scrambling and smiling.”

Colorado: “Western Colorado has begun to see a huge climb in remodels. People have stopped building and are spending more money creating an outdoor oasis or re-doing an ’80s fireplace or kitchen.”

Hawaii: “Near full employment, but average income has declined. Plenty of high-end condos under construction, but very little single-family housing. Extreme lack of affordable housing (average home over $650K). Rising homelessness is out of control.”

Washington: “Consumer confidence is up in my area along with employment. Homes are selling but mostly entry-level homes. Commercial construction is strong but single family residence isn’t.”

Target vs. Actual Margins

In 2014, targeted margins decreased by four points from 2013, while actual margins were two points beneath that number.

Canada

British Columbia: “Very slight decrease.”

Manitoba: “All is good. Bad weather did not help patio sales, but there’s a positive outlook for 2015.”

Ontario: “Great economy. More people of money are spending.”

Saskatchewan: “Continued growth in new and previously-owned home sales.”

Retailers Outlook for 2015

The 65 percent of responding retailers who are anticipating higher sales in 2015 is a four percent drop from 2013 survey results.

2014 Early-buys

The percentage of retailers who have placed, or plan to place, early-buy orders for the current sales year is 12 points below 2013 survey results.

More Industry Data

2018 October Business Climate

In early November, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, patio, and barbecue products, asking them to compare October 2018 sales to October 2017. The accompanying charts and selected comments are from the 232 useable returns.

» Continue

2018 September Business Climate

In early October, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, patio, and barbecue products, asking them to compare September 2018 sales to September 2017. The accompanying charts and selected comments are from the 2,003 useable returns.

» Continue

2018 August Business Climate

In early September, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, patio, and barbecue products, asking them to compare August 2018 sales to August 2017. The accompanying charts and selected comments are from the 196 useable returns.

» Continue

2018 July Business Climate

In early August, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, patio, and barbecue products, asking them to compare July 2018 sales to July 2017. The accompanying charts and selected comments are from the 193 useable returns.

» Continue