Furniture sales, options to climb for discounters - Discount Store News Annual Discount Industry Report; Part 2: Merchandising and Productivity Report

Discount Store News, August 2, 1993

Discount stores and the types of furniture manufacturers that supply them will be the beneficiaries of the decline in traditional furniture sales during 1993.

Escalating raw material prices, while affecting both ready-to-assemble and case goods products, are expected to lead to large price increases among makers of solid wood and wood veneer furniture.

The furniture category at full-line discount stores reached $2 billion of total chain sales during 1992, according to DSN's State of the Industry Report: Part 2 report, which entailed interviews with leading retailers, manufacturers, research organizations and trade associations. Living room furniture--which is almost exclusively entertainment units and television carts--represented half of category sales through full-line discounters.

Discounters will be given several new furniture options this year which could prompt chains to re-evaluate where various furniture types are merchandised.

Plastic and metal furniture options are growing as are unfinished furniture styles by vendors like Whittier.

Rubbermaid has entered the furniture category in three ways: Roughneck storage cabinets for workshops, Roomworks art deco-styled office furniture and entertainment centers, plus the Aspira computer furniture collection from Rubbermaid's MicroComputer Accessories division. All introductions are plastic and geared to discounters.

Wire manufacturers such as InterMetro have developed products which are more furniture pieces than bare bones wire storage items.

While chains might continue to merchandise wire products with wire storage, plastic cabinets with garage-type storage pieces, and unfinished furniture with wood stains and finishing merchandise, the influx of new products could cause some retailers to rethink the positioning of these various furniture segments.

RTA leaders such as Ameriwood, Bush, Cosco/Charleswood, O'Sullivan and Sauder continue to dazzle both discounters and traditional furniture retailers with the combination of excellent styling and affordable prices. RTA manufacturers are now entirely instep with the latest furniture trends ranging from Shaker and Mission styles to contemporary and traditional. With very few exceptions, the RTA industry has been able to duplicate the look of every major type of wood and wood finish.

With the advent of simplified assembly systems last year, one of consumers few remaining objections to RTA furniture will be reduced.

In addition to simplified assembly systems, the availability of RTA assembly services could enable retailers to win over consumers who did not purchase RTA because of assembly. BizMart, for instance, offers assembly services at nine stores and Office Depot is testing use of an assembly service at some locations.

Last year was one in which vendors and discounters stretched the potential of RTA to two extremes: paring costs and honing efficiencies to the point where a three-shelf book-case could actually be sold for under $20, while simultaneously selling home theater units for fifteen times that amount. In both scenarios, the value to the consumer was indisputable.

Gusdorf's demise resulted in expanded opportunities with new and existing accounts for other competing manufacturers.