The moment of truth is, finally, at hand. Memorial Day sales are in full swing as the industry reaches a key moment on its calendar. The vital summer selling season is now under way.
I’m going to go out on a limb and declare that Memorial Day promotions will drive strong mattress sales. I know that the home furnishings industry faces geopolitical and economic headwinds, but I also know that tent-pole holidays like Memorial Day bring out heavy promotional salvos, as they should. This is Go Time, and the industry is anxious to Get Going.
Harbingers of Memorial Day success are already swirling through the industry. Mattress exhibitors at the recent High Point Market were almost universally optimistic about the industry’s prospects for the Memorial Day holiday.
Those hopes were buoyed by the April mattress survey recently released by Piper Sandler, the investment and research firm that closely tracks the mattress industry. Piper Sandler said mattress retailers reported accelerating sales in April, a “particularly impressive” performance that “bodes well” for Memorial Day sales.
“Importantly,” senior research analyst Peter Keith wrote in the April report, “the Q2 outlook remains healthy at +MSD (mid-single-digit) growth with retailers expecting a solid Memorial Day weekend.”
Asked about their growth expectations for the three-day Memorial Day weekend, the retailers surveyed by Piper Sandler said they expect sales to be up by a mean of 6%. Keith said those expectations are “quite strong,” as they would be coming on the heels of healthy Memorial Day sales in the past two years.
Add all of that up and I think it’s reasonable to expect a nice surge of Memorial Day business. But the real question is: What happens after Memorial Day? That’s what one bedding exec asked me in High Point, worried that mattress momentum may be short-lived.
And it could be.
The summer sales outlook is a bit cloudy at the moment. The Iran war remains a wild card. Higher energy costs are a negative for consumers and for businesses. And the foam supply chain remains constrained.
A majority of retailers surveyed by Piper Sandler expect price increases in the second half of the year, with most respondents expecting mattress price increases on average ranging from 5% to 15%. About half of the retailers say those price increases will have no impact on sales, but about one-quarter expect sales to decrease, with unit declines outweighing price increases. Interestingly, 15% of the retailers expect price increases to lead to an increase in sales.
On the plus side of the ledger, the second half is going to start with a bang — an explosion of fireworks that will accompany a historic July Fourth holiday. Those holiday sales should be robust.
I’m adding a strong July Fourth holiday to a solid Memorial Day. And those two good holidays would put the industry in a good position to regain its growth this year. Do I get a second on that motion?
