NEW YORK–Not only was holiday 2008 one of the worst in decades at retail, the home business also sank to new lows.
Retail sales of home furnishings and furniture plunged 22.5 percent from 2007, according to MasterCard Advisors SpendingPulse, which tracks retail sales.
SpendingPulse tracked the season from Nov. 1 to midnight Dec. 24. And at least one analyst predicts that home merchants will log double-digit comparable-store sales declines.
SpendingPulse reports on national retail and service sales, and is based on aggregate sales activity in the MasterCard payments network, adding in estimates for all other payment forms, including cash and check.
Joseph Feldman, managing director of Telsey Advisory Group, anticipates that the home furnishing retail sector—which includes merchants such as Williams-Sonoma, Bed Bath & Beyond, Pier 1, Cost Plus and Ethan Allen—will post holiday comp-store sales declines in the mid-teens.
TAG originally projected in October that the sector would be down about 8 percent, but macroeconomic factors have deteriorated since then, Feldman said.
“Job losses have been significantly worse, the housing crisis hasn’t improved,” he said.
And the sales trends have not been good at the nation’s biggest home stores.
Williams-Sonoma forecasted fourth-quarter comp-store sales declines between 24 and 28 percent; Pier 1 saw its comps sink 17.8 percent for the third quarter ended Nov. 29; and third-quarter comp-store sales at Bed Bath & Beyond—the teacher’s pet of home retail—fell 5.6 percent, and “they’ve never done anything that bad—ever,” Feldman said.
During the holidays, “The consumer just really curtailed spending, particularly in home goods.”
And the liquidation of Linens ’n Things didn’t help matters.
“Without question it has hurt Bed Bath & Beyond,” Feldman said.
And while the heavy discounting at Linens ’n Things dampened home sales at other merchants, the impact was likely small, as Linens represented about 3 percent of the home furnishings retail market, Feldman said.
“It had an impact, but the vast majority of the negative drag is due to the economy and a weak labor market.”