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No one disputes that 2023 will be a difficult year for the bedding industry. We have been through many ups and downs, but as we moved into the fall shopping season, the spigot suddenly turned off.
Some say the dramatic cessation of rain began in August. For some, September was a cliffhanger, and for others they held out until October, when their business suddenly came to a halt.
The industry’s publicly traded companies, Tempur Sealy International, Purple Innovation and Sleep Number, all cited the near-sudden slowdown in their earnings reports. For example, Sleep Number’s third quarter showed a significant decline, and the company announced that it would cut 500 employees from its payroll, representing 10% of its employment, and close up to 50 stores by the end of 2025. Did.
While this is tough news, the industry as a whole is not far behind these companies, which are required to share hard numbers every quarter. They offer an open book glimpse into industry-wide trends.
In recent months, a number of bedding industry executives have spoken out about the industry, saying the economic definition of a recession (two consecutive quarters of decline in gross domestic product) may not apply. did it They say it’s a recession. At least, that’s what it appears to be.
Last year, the domestic mattress market achieved positive growth in shipments in 2020. According to the International Sleep Products Assn., shipments in the category increased by 7% that year. From there, he saw a decline in shipments, from a low drop of his 2.7% in 2021 to a big drop of his 14.7% in 2022.
As 2023 concludes, ISPA predicts that mattress and foundation shipments will decline another 12% this year to 41.3 million units.
If 2023 were to end with that 12% decline, it would be worse than the industry’s performance in 2008, when it recorded an 11.9% decline.
All of us, at least most of us, remember the economic times of 2008 and 2009, when the real estate bubble burst and we entered the Great Recession. It was slow, dull and difficult to emerge from, but the industry slowly and steadily recovered on the back of home sales supported by low interest rates.
The industry is hoping for a dramatic recovery in 2024, but I’m not confident. Please note that I am not an economist. I don’t even play it on TV. But we’re already seeing the dark side of presidential election season, and it’s likely to grow louder as the new year begins and November approaches.
Advertising is difficult and expensive because inventory is eaten up by candidates yelling at each other. All the noise also affects consumer psychology, often sending them into an even deeper state of hibernation.
Wait a minute; 2025 is coming. It will take some time to get there.
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