Supply Chain Research

Americans’ appetite for new, foreign furniture continued unabated in July. Panjiva data shows imports likely increased y 15.7% on a year earlier – the fastest rate since February 2016 – and the fifth straight month of growth in dollar terms. Furniture store retail sales climbed by 4.3%, official figures show, suggesting an increased demand for overseas products vs. domestic, as well as a potential loss of market share for traditional retailers.

Chart compares value of all furniture  imports to furniture retailers sales based on U.S. Census Bureau data Source: Panjiva

Among the major retailers there has been a marked disparity in performance, with the larger retailers outperforming the smaller ones. The largest importer – by volume – remained Ikea, which expanded 20.1%, while Rooms-to-Go (number two) expanded by 36.8%. Dorel and BigLots meanwhile both contracted, which may prove to be a challenge for the latter’s full year outlook for growth in revenues of a “low single digit” percentage amount.

Seaborne imports of selected furniture categories for Ikea, Bob’s, Rooms to Go, Dorel and Big Lots on a trailing three month total basis Source: Panjiva

A major supply chain challenge for the industry may come from tighter trade policy. In the second quarter 50.2% of U.S. furniture imports by value came from China. Shipments from there have also outpaced the national average, rising 15.2% on a year earlier vs. 9.7% for the total. The recently launched section 301 investigation of Chinese intellectual property policy, as outlined in Panjiva research of August 31, may result in broad tariff. Furniture is both a large area of imports and one where restrictions could help American industry directly.

Chart segments U.S. furniture imports by country of origin. Latest month data based on seaborne shipments. Lower panel compares imports to furniture retailers’ sales. Calculations include U.S. Census Bureau figures. Source: Panjiva