Top business consultancy takes industry to task
By Alan Wolf, YSN
Ken Smith, a founding partner of leading furniture industry consultancy and accounting firm Smith Leonard, is up in arms over pricing pressure at retail.
Writing in his monthly “Furniture Insights” newsletter, the industry expert said he was troubled by talk at last month’s High Point furniture market of “a continued push” to lower price points. Smith said his firm has been pushing the industry to maintain the higher pricing it realized during the pandemic-induced product shortages of the prior two years, as costs remain high and the consumer has demonstrated a willingness to accept stiffer retails.
“We understand that prices can and should be dropped for the change in container costs, but most other prices, for material and labor, have not gone down much,” Smith wrote.
“It would be a shame,” he added, “for the industry to give back much-needed margins that were seen during the pandemic.”
Elsewhere on the subject of High Point, Smith described the market’s mood and attendance as “pretty good,” although many complained of a slowdown in business. For their part, retailers cited a decline in traffic but said “those who do shop seem to be buying,” he noted.
The slowdown was reflected in the firm’s latest survey of residential furniture manufacturers and distributors, 80% of whom reported a decline in new orders in February. New orders were 17% below the prior year’s levels on average but up slightly from January 2023, the poll showed. February shipments and backlogs were both down 6% from January, and inventory levels were up 5% from February 2022, the consultancy said.