ISPA: Bedding down in units, up in dollars in 2016

David Perry — Furniture Today,
ALEXANDRIA, Va. — The International Sleep Products Assn.’s first look at business last year suggests the


bedding industry suffered a rare unit decline but was up in dollars.
The results are preliminary and are subject to change, based on the findings of ISPA’s annual sales census. Final results won’t be available for several months.
Jim Nation, Spring Air president and ISPA’s incoming chairman, said he believes the final figures will show that units declined in 2016. If so, it will be only the third unit decline since 1990, according to ISPA’s statistics.
“Consumers are more cautious in their spending and are delaying their purchases,” Nation said. “Also, we are battling the electronics industry and they won last year.”
The first-look data comes from ISPA’s survey sample of 19 leading U.S. mattress producers. The survey showed that unit shipments for 2016 were down 1.1%, “offset by a healthy increase of 6.4% for wholesale revenues,” ISPA said.
Those results, ISPA said, “suggest average annual growth rates for the three-year period 2004 through 2016 totaled 2.0% for unit shipments and 9.7% for wholesale revenues, continuing a strong industry trend whereby wholesale revenues have increased every year since 2001.”
That performance, ISPA said, “is attributed to increased demand for high-end products priced above $1,000 plus other favorable economic and demographic trends.”
But the ISPA figures also revealed a significant sales slowdown in the fourth quarter last year, with dollars up only 2.1% and units down 1.8%. But there was a quarterly average unit sales price increase of almost 4%, ISPA said.
The decline in 2016 unit shipments in the sales survey reflects negative year-over-year comparisons in six of the 12 months, including a five-month trend beginning in August, ISPA said. It said that trend “suggests consumer demand for durable goods purchases such as furniture and bedding continues to be squeezed by economic factors, such as increased mortgage rates, a recession in the housing sector, higher energy prices and increased interest rates.”
Nation said he believes the electronics industry scored last year with several products, including iPods and flat-screen TVs. “Every year the electronics industry has big, hot products or marketing stories, the mattress industry doesn’t do as well,” he said. “Our industry doesn’t have a product … that when it comes out everyone has to have one. We lack the ability to create mega-products.”
Visco-elastic mattress leader Tempur-Pedic has come the closest to creating bedding mega-products, he said.
ISPA’s forecasts call for a return to growth this year and next year. Unit shipments are expected to grow 1.5% in 2017 and 3% in 2018. The value of bedding shipments is expected to grow 8.5% and 8% in the next two years, according to ISPA.
Furniture/Today’s Bedding Consensus Forecast calls for a unit decline this year of 0.1%, but a 5.4% increase in the value of bedding shipments.
The overall trend in the industry “is one of steady growth, with average annual dollar growth rates of 6.5% for the last 20 years,” said Dick Doyle, ISPA’s president and CEO. “This latest report is consistent with the trends predicted by our econometric model for the entire industry, which statistically links the bedding industry to the larger home furnishings market and the national economy.”
ISPA said a regional breakdown indicates the South continues to lead in the number of units shipped and in wholesale dollar value, followed by the West, the North Central and the Northeast regions. The South and North Central regions experienced unit declines in 2016, ISPA said, but all regions had dollar growth last year.