By Richard Wright
Ed. Note: At the beginning of July, Hearth & Home sent a questionnaire to 1,150 patio retailers. A total of 127 were returned and usable.
We’ll have to wait a bit longer for good news from the specialty patio channel. This is the fifth year that sales are flat in comparison to the same time period a year ago.
Only 30 percent of responding retailers posted sales greater than those in 2013; 30 percent saw sales go down, and 40 percent stayed even with the prior year.
On another note that won’t thrill manufacturers, only 13 percent plan to increase their early-buys this year, while 22 percent will decrease those orders further.
Retailers' Early-Buy Plans
This year, five percent fewer retailers plan to increase their early-buys, while 11 percent more will decrease those purchases.
Connecticut: “Consumers seemed to recover to some degree over the previous year. Their spending patterns seemed to return to a conservative normal. We kept inventory at bare bones minimum as a result of the reluctance to outlay larger sums of cash. There is a pent-up desire to spend on home furnishings and one that we hope is going to come to fruition this year.”
Massachusetts: “Late start, but very good May and June sales across all lines and looks. Down on 20K-plus sales, up on 2-5K-sales, smaller groups/ pieces but more of them.”
New York: “Overall, our season has gone well. We got off to a late start due to the tough winter, but things have gone very well since late March. We’ve found that our customers have been much more confident this season, but it seems that most manufacturers were ill-equipped for the increased demand and had supply issues. Fortunately, we had forecast an increase in sales of five to seven percent, so we had decent inventory levels – until now.”
New York: “Too much on-line competition. Big Boxes sell lesser quality products, but the bigger issue is on-line competition. People shop our store to decide what to buy, then go home and get it online.”
Pennsylvania: “Weather was a big challenge early – April was terrible. May and June are about average. We see lots more ‘shopping’ and a little less ‘buying.’ I think most people still think the economy is bad regardless of the stock market and improving unemployment numbers. Our best line last year has underperformed and our slowest line last year has sold well – tough to figure. In general, lower priced sets are selling better than ever.”
Pennsylvania: “We were left with quite a lot of furniture last year. This year I did not stock much, so we have made a dent in our inventory. Many people have inquired about the poly furniture but it was too expensive for them. Haven’t decided if I want to sell patio furniture next year.”
Pennsylvania: “Seemed to start strong, but stalled mid-season.”
Pennsylvania: “Season started late and ended quickly. We are still busy in other areas. Economy sucks.”
Alabama: “Patio business is soft. Not building many new homes in our market area. Customers are mostly fairly comfortable about the economy if employed by one of our area’s major employers. But they’re not comfortable about the overall economy of our country. They buy what they need and consider to be must-haves, but are slow about taking on much new debt, especially new housing, which hurts our business.”
Louisiana: “This was a year to catch up on leftover inventory from 2013. Sales have been good. Lead times have been a factor with the increase in sales. Many customers are replacing cushions and slings.”
Mississippi: “Economy is very bad!!”
North Carolina: “We reduced early-buys this year and boy are we glad we did. Our balance sheet is much improved, cash position better, inventory down. I am doing my best to say good-bye to early-buys in hearth and patio. Overall sales are about the same year-to-date as last year.”
South Carolina: “All-weather wicker has gained in strength, especially at the mid-price points. Cast aluminum is strong. A new offering in teak has been good. Wrought iron is flat with last year.”
Tennessee: “This year’s sales are definitely down, traffic has still been good, and customers’ attitudes have been good as well; we are up in most of our areas. Upon reviewing our numbers, it appears we are a tick above where we were in the 2012 season (which was very good); our 2013 was just a boomer and this year has not measured up to that. We seemed to play more small ball this year – lots of singles and doubles. But last year we hit quite a few home runs – enjoy them when you hit them.”
Texas: “Customers are doing a lot of online shipping, not affecting our business as a whole, but coming in with price-points from online. Freight is way up and we seem to have a lot more freight-related damages and claims. Economy is way up in our area – West Texas (oil).”
Texas: “Very strong in opening price points ($999-$1,499 5 pc. dining, $999 sofa) and in mid-price points ($1,599-$2,999 5 pc. dining, $1,099-$1,699 sofa), but weak in upper price points. Custom orders are way down. Our dollar per sale is up and guests are mixing collections (woven deep seating with teak occasional, aluminum dining) for more eclectic outdoor environments – more reflective of interior of home.”
West Virginia: “Sales were up before Memorial Day, then dropped off.”
Patio Furnishings - Mid-Year Report
Year-to-Year Retailer Sales
For the fifth consecutive year, median mid-year sales of patio furnishings at the specialty retail level in the U.S. were flat.
Indiana: “Harsh winter led to slow sales in the first 3 1/2 months of 2014.”
Michigan: “Our main problem was the wet and cold spring (April, May). Memorial weekend was our actual big kick-off for our patio season! I don’t think the economy played a big factor. Even though we were down, our average sale increased from $1,000 to almost $1,400 this year. Big Box stores are still a thorn in our side as customers still have to be educated on the difference in quality, service etc.
“We did increase fire pits, which was a good thing and helped that big ticket sale. Sling aluminum is drastically down from previous years. All-weather wicker is still strong for us. We believe that July will be a record month and offset some of our spring.”
Michigan: “Consumers are buying again. We have had a larger influx of contract sales this year compared to year’s past. Customers have been more concerned about U.S.-made products than in prior years. As programs go, wicker and rattan have been significantly down as compared to other deep-seat style furniture.”
Michigan: “Most manufacturers with their yearly price increases have pretty much priced themselves out of the middle to middle-high end sling chair business. Propane fire pits are still hot (no pun intended).”
Michigan: “Where have the middle income customers gone? Are they spending money? We have seen a big increase in repairing furniture from past sales.”
Missouri: “We just started selling outdoor stuff this year. We carry a mid-price line and a high-end line. The mid-price we sell 10-to-1 over high-price.”
Missouri: “We’re finding early-buy paid off this year. The last couple of years it didn’t really have an impact when we cut back on early-buy. This year our vendors can’t keep up – so we’re glad we did early-buys. Money has loosened up. Customers are not as price-driven but still remain realistic when shopping. Customers seem hopeful and light hearted – but careful.”
California: “We opened a new store and it is doing better than expected!”
California: “We closed our second store May 1, 2014. No new building. We are a seasonal store with snowbirds gone during May – October. Our season is November to May. Stores are closed and the economy has not come back in the desert.”
Montana: “In-store traffic for patio furnishings has been lighter than last year (which was already light) even though the hearth business and its traffic is robust. My guess is that upscale patio furnishings sales are going more and more to high-end catalog/online brands, i.e., Restoration Hardware, Crate and Barrel, Westminster, etc., and other web opportunities. The retailer is hurting as a result.”
Washington: “We are having a great year, overall up seven percent. Fantastic Memorial Day sale pulled a lot of June into May. More up-selling on furniture resulting in lower-end products moving slower. People are willing to spend!”
Mid-Year Sales Seasons
Comparisons to Previous Year
Only 30 percent of responding U.S. retailers had greater mid-year over mid-year sales, while an equal percentage (30%) reported lower sales.
British Columbia: “Huge delays in shipping and then poor quality upon arrival was our major issue. Our manufacturer refunded us 25 percent of our order and we sold it as factory seconds. Recycled poly has really taken off for us.”
British Columbia: “We ordered heavier for this season; the port strike in Vancouver created extra costs for storage and transport as some containers had to be unloaded in Seattle and then transported up to Vancouver. Customers have more stores to choose from; more retailers are getting into outdoor furniture.
“Since we sell barbecues and patio furniture and umbrellas and fire tables, we are still selling packages and it’s easier for the customer to see and buy from a one-stop shop. We also increased our advertising budget. I will probably tone down booking for 2015 season.”
Ontario: “It has been a cool spring and summer. The residents in our area have concerns about their future (financially).”
Ontario: “Weather sucks. Too wet and tons of mosquitos make sitting outside less than enjoyable.”