The recent announcement that Bob’s Discount Furniture has 20 store openings planned for 2025, including its first foray into the Southeast, spotlights the increasing likelihood of head-to-head competition among some of the industry’s largest players.
As business has slowed in the past several years, the need to achieve growth by taking share from competitors has grown both more common and more necessary. In the retail arena, that has resulted in heightened competition in key markets.
When Bob’s opens its first North Carolina stores later this year in Fayetteville, Durham, Wilmington and Cary, in addition to the Ashley stores that Bob’s faces in most of its existing markets, it will also find Rooms To Go stores nearby. This isn’t the first time these top 10 heavyweights have crossed paths — both currently operate stores within a few miles of each other in the Tidewater area of Virginia — and it is unlikely to be the last given Bob’s aggressive expansion pace.
It’s certainly not uncommon to have multiple furniture dealers operating in proximity to one another. Any industry veteran could name dozens of examples around the country of furniture clusters, where myriad stores can be found along a popular roadway. However, if you see that cluster in Florida, it’s likely to include a different group of dealers than you might find New York, or California, or Chicago.
That appears increasingly likely to change.
Since the pandemic, there have been a series of major retail closings, freeing up hundreds of furniture-friendly locations and billions in consumer furniture spending. It is rarely the case that when a player goes out the totality of its former sales are captured by the remaining players. However, with the most recent wave of consolidation coming primarily within the value segment, the competition to capture some portion of that massive segment will be intense.
That, coupled with the growing number of regionals looking to expand beyond their traditional borders, will make the competition for key markets and customer segments even more heated. We’ve seen several examples in recent years including an increasingly crowded competition in Houston, heightened activity in the Pittsburgh-Cleveland corridor, an on-again-off-again battle for Chicago and an emerging tussle for tony Austin market.
In addition, Florida has become a hotbed of Top 100s built on the state’s rapidly growing population and its plethora of second homes. The pandemic only accelerated that growth, making the state even more attractive to new players and making it one of the country’s most competitive furniture markets.
That said, don’t be surprised if some of the stronger players that grew up in that market look to begin leveraging those lessons to expand beyond the sunny state’s borders.
In sum, the big are getting bigger and are competing across an increasingly widespread retail battlefield. It wouldn’t be surprising to see further consolidation this year, nor would it come as a shock should the pace of retail merger-and-acquisition activity spike before the year is out.
Stay tuned. It’s going to be a busy year.
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