Insight Flash: US Home Furnishings Market Remains Weak, But Decor and Midwest Brands Offer Hope

The US home furnishings market remained weak during the first quarter of 2024, as inflation and high interest rates for new mortgages pressured prospective home buyers. Among different home furnishings classifications, furniture and diversified companies performed the worst, whereas decor was the lone bright spot. Regionally, Midwest companies experienced the lowest decline, perhaps due to housing affordability and lower inflation compared to the national average.

Investors can leverage these Consumer Edge data insights to assess the opportunities across the industry, while retailers can gain visibility into how transaction data can be used to drive strategic decision-making.

Consumer Edge Data Analyzes Struggling US Home & Garden Industry

The US Home & Garden industry struggled in 2023 due to rising rates that put pressure on new mortgages and prospective homebuyers. Home furnishings underperformed as people staying in their homes appeared to spend more money on home improvement projects that could pay off when they are ready to sell.

Home Furnishings vs. Home Improvement Year Over Year Growth

Consumer Edge data shows that the home furnishings sub-industry experienced double-digit decreases throughout 2023, but declines did moderate to -9% in 2024Q1. The home-improvement sub-industry, meanwhile, experienced low-single digit declines throughout 2023, with the trend continuing into 2024Q1 with a -2% drop.

Furniture Underperforms, Decor Thrives with Tightened Home Spending

Diving deeper into the home furnishings market, we can classify companies by product (furniture, mattresses) or function (kitchen, decor). Some companies, such as Wayfair, offer a wider range, acting as diversified one-stop shops. Among the different home furnishings classifications, furniture companies declined the most in 2024Q1 (-9%), followed by diversified companies ( -4%). The furniture decline was driven by Ikea and RH, with WSM’s Pottery Barn and West Elm contributing as well. Smaller retailers such as BSET’s Bassett Furniture at HVT’s Havertys Furniture also experienced large declines. This weakness comes amid a  cooldown in the housing market as there is a reduced need to fully furnish new homes. Additionally, with high interest rates, consumers may be avoiding more expensive, higher-ticket items such as furniture. As for diversified companies, large drivers of the decline included Conn’s and Wayfair. Smaller brands Grandin Road and Serena & Lily also felt the pain from the tough macro environment. 

Decor was the only home furnishings category posting positive growth at +3%, with TJX’s Homegoods as the major driver of strength. Pura Scents and Swarovski were among the top-performing smaller brands benefiting as consumers opted for minor improvements to their living spaces. 

Regional Differences Favor Midwest Companies

Shifting to home furnishings performance by census region, the Midwest appears to be outperforming the other regions in the country, perhaps driven by better housing affordability and slightly lower inflation than the national average. The relative strength of the Midwest could be a positive sign for companies with the majority of their stores in the region such as Hom Furniture and Slumberland Furniture, but also for online companies such as Pampered Chef and Scentsy which derive more of their revenue from the Midwest than other home furnishings companies. Could the Midwest point to a potential upswing in home furnishings growth if inflation wanes and mortgage rates fall?

In the coming year, clients can continue to use CE data to see how consume spending on home & garden fares, both by subindustry like home improvement and home furnishings and across different US regions. 

Consumer Edge is the leading provider of alternative data for consumer spending behavior, and the only provider of global revenue signals. If you’d like to benefit from using CE Transact US, CE Vision, or other products for home furnishings insights, market intelligence, and other industry data year-round to track trends and market hits like these, reach out to request a demo.

About the Authors

Michael Gunther is the VP Head of Insights for the CEIC. Explore more of his insights here and follow him on LinkedIn.

Harsh Masher is an Insights Analyst for the CEIC.