This is the final Furniture Today issue of 2024, a year that many will be glad to have in the rearview mirror. Anecdotally, the year appears to have finished stronger than it began, with many furniture dealers reporting solid post-election day sales and a Black Friday week that was stronger than expected.
That said, there remain several questions heading into 2025, not the least of which is the prospect of tariffs and their imposition on any number of potential furniture producing trade partners. At this writing there is little to go on but speculation and a few social media posts that have identified China, Canada and Mexico as the first likely targets.
Whether or not that remains the case is anyone’s guess as is the extent to which public statements to date can be viewed as a negotiating posture or a statement of intent. However, no one who went through the imposition of 25% tariffs on furniture imports from China in 2019 is likely to ignore the possibility of getting hit again.
As a result, many retailers and manufacturers are hedging their bets either stockpiling goods at current prices or by exploring new global sources that appear less likely to get hit with new tariffs. The global sourcing carousel has been in motion for the past five years, and the only thing that’s becoming increasingly clear is the number of countries in play continues to grow.
The other unknown as we move into 2025 is consumer demand. While the fourth quarter offered some hope of improvement, there are several factors that need to improve for that demand to turn into a full scale recovery. The first is consumer buying power.
Particularly at the promotional end of the business, consumer discretionary income continues to be negatively impacted by stubbornly high prices for necessities. While another interest rate cut is expected — which could improve the housing market — barring a significant drop in prices for food, housing and fuel, lower income consumers will continue to be challenged to afford major household purchases.
Contacted by Furniture Today, a substantial number of industry executives say they expect the business to turn around with most pointing toward the second quarter of 2025 as the turning point. By that time, the tariff picture should be clearer, and interest rate cuts (presuming the next round occurs) are expected to strengthen housing activity and improve consumer access to funding.
At the same time, furniture manufacturers have been very assertive the past two markets with aggressive pricing and dramatically enhanced feature sets. While that will put some of them under increased margin pressure, the result — for consumers — is likely to be some great deals.
Much of this annual Retail Planning Guide is devoted to addressing exactly these issues and looking at how they will impact key categories across the business.
As you head off to the holidays, hopefully you will find cause for good cheer in these pages. Happy Holidays from all of us at Furniture Today and best wishes for a successful 2025.
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