What’s the deal with kids these days? Whatever it is, it is playing havoc on the home furnishings industry at a level not seen in decades, if ever.
A report in The New York Times last month discussed how the trend toward going back to living at home among college graduates—ostensibly to save money in this troubled economy—is hurting sales on everything from lamp shades to bedspreads and housewares. These new college grads either make too little money or often none at all and are moving home by the boatload to make sure that whatever money they have can continue to go toward the more important things in life, like beer, clothes, shoes and music.
Make no mistake about it, this is bad news for home furnishings retailers. The Times article stated that just 950,000 new households were created in 2010, compared to about 1.3 million households created in 2007, the year before the latest recession started. Many of these homes are created by new college grads, who are normally excited about starting a home of their own and getting away from mom and dad as quickly as possible. Other new homes are started by immigrants and people getting divorced, another segment that is not growing at the same rate because of the economy and the fact that many separating couples cannot afford two households.
Of course, any new home must be furnished and that usually means more sales of couches, televisions and tables. It seems that all homes are required to have a frying pan and a coffeemaker, not to mention silverware, dishes and other amenities just to make them look nice. When kids do not move out, none of these items are purchased for the new places. It may be a temporary issue since eventually these kids will have their fill of their parents and move out, but it is enough to add to the woes already facing the home furnishings industry.
Where does that leave the retail industry? As noted, this trend is cyclical if only because of the normal relationships between parents and their kids. Eventually mom and dad will get tired enough of their grown children’s antics and will start pushing them out of the house. The kids will also eventually tire of living under the mandate of their parents.
So retailers must hold on for the next few years until this trend starts to turn. In the meantime, merchants must make it as practical as possible for those young consumers who do move out of their parents’ home to purchase as many items as possible for their new households.
It would be a good idea to also add more products for mom and dad that may help them deal with having adult children roaming around their homes just when they thought they were getting ready to start to enjoy their carefree golden years.
Carrying a healthy assortment of earplugs may help as well.
Seth Mendelson is the editorial director of HFN. He can be reached at smendelson@hfnmag.com.