Hearth Specialty Retailers - U.S.

3,230

Specialty Retailer Gross Revenues – Hearth products and accessories

U.S.

Percent of total hearth revenues represented by hearth accessories

12%

Average Target Gross Margin for 2015

43%

Average Actual Gross Margin for 2015

39%

Percentage of retailers equaling/exceeding average target gross margin

39%

Indoor selling area (median sq. ft.)

2,500

Indoor selling area devoted to hearth products in season (median sq. ft.)

1,800

Percentage of retailers who opened a new store in 2015

2%

Percentage of retailers who plan to open a new store in 2016

3%

Percentage of pellet appliance retailers selling pellet fuel

44%

Average tons of pellet fuel sold by pellet appliance retailers in 2015

444

Average U.S. wholesale price of pellets in 2015

$214

Average U.S. retail price of pellets in 2015

$271

Average number of units on the

Average number of years retailing hearth products

25

In 2015, sales of hearth products in the U.S. were basically even with the prior year which, at 12 percent growth, were fairly robust.

There are still far more hearth retailers that sell only hearth products. The much safer bet is to build sales of counter-seasonal products.

Sixty percent of hearth retailers are in market areas with under 250,000 people.

Forty-seven percent of hearth retailers have total sales of all products in excess of $1 million.

Thirty percent of hearth dealers have sales of hearth products and related accessories in excess of $1 million.

Average Wholesale Price

$214

Average Retail Price

$271

In 2015, 25 percent of retailers who sell pellet fuel sold over 500 tons.

In 2015, 25 percent of retailers who sell pellet fuel sold over 500 tons.

In 2015, the percent of hearth dealers who sell pellet fuel declined by four percent.

Approximately one-quarter of pellet fuel retailers were not able to secure a sufficient amount.

Average number of tons sold:
375 tons

In 2015, retailers found themselves short an average of
91 tons of pellets

The following four charts show 2014 specialty retailer sales to retail customers, new housing contractors and remodeling contractors for the indicated products.

For the average hearth dealer, the Big Three, Vented Gas appliances, Wood appliances and Pellet appliances, represent 80 percent of their business, which is a decline of seven percent.

When selling a hearth product as a replacement, 51 percent of those sales are to replace either an inefficient wood fireplace or a pre-EPA stove.

In 2015, the percent of installations handled by the customer declined by four percent, while the category “Other” increased by seven percent.

This is a tough one to understand. While 2015 was a far weaker sales year than 2014, installation backlog days were greater in 2015.

There were few surprises here in 2015, with one exception. In 2014 only 77 percent of hearth retailers were selling gas fireplaces. In 2015, that figure rose to 88 percent.

Twenty-four percent of fireplace sales include surrounds, which is three percent lower than in 2014.

The average hearth dealer receives nine percent of his/her annual gross revenues from the sale of spas.

In 2016, 20 percent of hearth dealers plan to increase their marketing dollars, and by an average of 12 percent.

32 percent
of responding hearth specialty retailers plan to increase staff in 2016.

20 percent
intend to increase marketing dollars.

10 percent
say they will do both.

Sixty-two percent of hearth purchases by retailers are made in the last half of the year.

According to hearth retailers, gas products will own 2016, while pellet appliances face a dismal year – if retailers are correct.

Clean-burning fireplaces are the most expensive hearth products, while vented and vent-free gas logs are the least expensive.

In 2015, wood stoves/inserts, pellet stoves/inserts, and vent-free gas stoves all posted negative numbers in comparison to sales in 2014.