Despite worries of a recession, executives say retailers in Las Vegas were looking to the future.
The “r” word has been coming up in my conversations with industry leaders, but this is not the time to hit the panic button. Let’s make that clear at the outset.
Yes, bedding leaders are bringing up the topic of a recession. We may already be in one, if you operate on the idea that two consecutive quarters of economic declines constitute a recession.
We’ve already had two consecutive quarters of retail sales declines, according to the monthly retail mattress surveys conducted by Piper Sandler, which tracks publicly held companies in the mattress space. Sales growth in the first quarter was down by a mean of 1%, and it was down in the second quarter by a mean of 14%, according to the firm’s retail surveys. Those are surveys, not comprehensive business accountings, but they are headed in a negative direction.
A look at some of Piper Sandler’s recent reports adds insights on the current mattress industry environment. Comments such as “weak demand trends,” “an uncertain consumer spending environment” and “supply chain delays” are notable.
Despite these gloomy reports, industry leaders at the recent Las Vegas Market found causes for optimism. Although I tested positive for Covid-19 just before the market and was forced to stay at home, I reached out to executives later to get their assessments of what happened in Las Vegas.
Glenn Kobylarczyk, executive vice president of Mlily USA, said retail behavior is changing.
“The slowdown in the economy and the anticipation of consumers being more careful with their money are leading retailers to seek sharper price points, so our new value line was of particular interest,” he said.
Gerry Borreggine, president and chief executive officer at Therapedic International, also talked about the current economic slowdown, but said it’s unclear if it will develop into a full-fledged recession. He said he was impressed with positive retail attitudes at the market.
“Retailers in our showroom were upbeat,” he said. “If you went to the Las Vegas Market in the summer heat you had to have some optimism about the future.”
Shaun Pennington, the chief executive officer of Diamond Mattress, acknowledged widespread concerns about the economy.
“Everyone is expecting a recession to happen,” he said, “but it doesn’t appear to affect the fact that retailers are interested in innovative products that consumers can get excited about.” New gel products at Diamond fit that bill, he added.
Mark Kinsley, chief executive officer at Englander, noted a positive buzz at the market. “People were happy to be together, recapturing the rhythm of the industry and focusing on finding ways to help people get a good night’s sleep,” he said.
That last point is critical. The way to really grow our category is to focus on selling better sleep, not cheaper mattresses. That’s been my steady refrain, and it’s more important than ever now that the pandemic has put a spotlight on health and wellness.
It’s encouraging that those executives see retailers adapting to the current economic climate and also continuing to look for innovative products that can create a buzz with consumers.
It’s uncertain as I write if the U.S. economy will officially be declared to be in a recession. Such a declaration, frankly, is of less significance to bedding companies than what is happening in our industry. And on that score, the recent Las Vegas Market found retailers remaining optimistic, looking for innovative products, as well as strong values, and enjoying the camaraderie that has always marked the mattress industry.
I hated to miss that market and the “dry heat” that accompanies the summer event, but I’m already looking forward to checking in with my industry friends in High Point in October. Then we will take stock of where the industry stands as this challenging year heads toward its home stretch.