Home and Garden Specialist Retailers in the US

2021 DEVELOPMENTS

Homewares and home furnishing stores’ sales rebound sharply in 2021

To put it bluntly, 2020 was a disaster for US homewares and home furnishing stores. Due to the COVID-19 pandemic, most operators in the channel were forced to temporarily shutter stores in March and April 2020, thus losing out on weeks of in-store sales.

Home improvement and gardening stores’ sales maintain momentum

In 2020, the COVID-19 pandemic encouraged many homebound consumers to turn to home improvement activities to occupy their time and to make the residences in which they were confined a little bit nicer. This trend very much benefited the home improvement and gardening stores channel, which recorded stronger sales growth than any other store-based retailing channel in the US in 2020 - including supermarkets.

HomeGoods dips its toes into e-commerce

In addition to operating TJ Maxx and Marshalls, two tremendously successful off-price apparel banners, TJX Cos Inc owns HomeGoods, the leading player in the US homewares and home furnishing stores space. Historically, TJX has been largely resistant to embracing e-commerce, with company executives loudly trumpeting that the in-store experience provided by its bricks-and-mortar outlets – which offer a “treasure hunt” experience for shoppers looking to find bargains in fashionable apparel, homewares, and home décor products – simply cannot be replicated in the online space.

PROSPECTS AND OPPORTUNITIES

As the US moves beyond the pandemic, home improvement and gardening stores’ sales growth is set to decelerate

Home improvement and gardening stores retailers have benefitted greatly from the conditions brought about by the COVID-19 pandemic. Over the last two years, US consumers often found themselves stuck at home, unable to spend money on many of the things they would otherwise normally like to spend money on – such as full-service restaurants, entertainment and travel.

Rising inflation could spell big trouble for furniture retailers

By the end of 2021, inflation in the US hit a near 40-year high, with the rate of inflation poised to rise even higher through the first half of 2022. This is a particularly worrying development for retailers that specialise in big-ticket items, as consumers are apt to hold back on expensive discretionary purchases during periods of high inflation in order to be able to afford the rising cost of groceries and other essential household items.

Bed Bath & Beyond’s pivot to private label may backfire

Target – the largest mass merchandiser, by sales, in the US – has a well-deserved reputation for stocking fashionable apparel, homewares and home furnishings products at reasonable prices, something which has endeared the retailer to many middle-class consumers – especially US women, who tend to view Target as a more stylish alternative to Walmart. A huge part of Target’s success is due to its remarkably effective private label strategy, which has seen the company launch a host of different store brands, many of which the company has succeeded in positioning as “exclusive” lines – enabling the retailer to command a relatively high price point on these products.