Home Furnishing: 2024 Outlook for Housewares, Mattress, and Furniture Retail

When we last checked in on the home furnishing retail category, we noted that we had started to see a divergence among several of the various subcategories, with houseware retailers seeing great visits year-over-year relative to furniture retailers. At the time, we hypothesized that housewares were outperforming because of several reasons, including (1) consumers’ willingness to spend around holiday periods last year due to post-pandemic home entertaining trends; (2) the departure of Bed Bath & Beyond and other retailer from the market driving visits to other housewares retailers; and (3) urban residential migration trends among younger families increasing demand for houseware trends. The divergence in visitation trends continued through the back half of 2023, with housewares continuing to outperform through December.

One of the home furnishing subcategories that flew under the radar in 2023 is mattresses. As shown above, this retail category didn’t quite keep pace with houseware retail visit trends, but outperformed value and full-priced furniture. What’s behind this outperformance? For starters, our data indicates that migration trends may play a role. We reviewed visitation trends for pure-play mattress retailers across the top 25 CBSAs in the U.S. (ranked by population) during the Black Friday promotional period (early November 2023 to early December 2023) and found that several of the top performing markets–New York, San Francisco, Minneapolis, Chicago, Detroit–had seen total population declines since the pandemic (according to Placer's Migration Trends Report) but also experienced a rebound in population growth this past summer, creating increased demand for mattresses. However, population trends continued on a downward trajectory in the second half of 2023 in a number of these markets, indicating this demand may not be sustainable.

What should home furnishing retailers expect in 2024? From a year-over-year visitation standpoint, we expect the subcategories to remain roughly the same in terms of rankings through the first half of the year, with housewares continuing to lead, followed by mattresses, value furniture, and then full-priced furniture. Continued migration trends across the U.S.--especially smaller markets–should continue to stimulate demand for housewares and mattresses (although Temu and other online retailers will also compete for houseware spending in the year ahead). Migration trends should also create demand for value furniture retailers, as should new smaller-format and smaller-market store openings from IKEA and others. Full-priced furniture will continue to face headwinds in the form of elevated mortgage rates (compared to last year), sluggish new housing development trends, and stagnant housing turnover, suggesting that visitation trends could be challenged for much of 2024 (despite facing easier comparisons).