2016 May Business Climate
May Sales
In early June, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, barbecue and patio products, asking them to compare May 2016 sales to May 2015. The accompanying charts and selected comments are from the 234 useable returns.
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RETAILER SALES – U.S. AND CANADA |
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What’s going on? In the heart of the patio season, only 23 percent of Patio retailers were up, while on the Hearth side, 47 percent were up. Barbecue did a bit better at 32 percent up, while Spas balanced out with an equal percent (45) of retailers up and down. |
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13 MONTH YEAR-OVER-YEAR RETAILER SALES |
Sales of Hearth products in May were up five percent, while the three other categories of Patio, Barbecue and Spas were just about flat.
Retailer Comments
Northeast
Connecticut: (Hearth) “Slightly more interest – no urgency. Thankfully we also sell awnings and do chimney repairs to keep us above water.”
New Hampshire: (Hearth) “This will be the 11th presidential election I’ve suffered through. All of the previous 10 have been a business disappointment. Add the recent historically warm winter combined with abnormally low petrol energy prices. Like any annoying storm, it will pass. Hopefully our industry will survive to see the Gold and Green rainbow.”
Maine: (Hearth) “Too much discounting.”
Maine: (Hearth) “Lowest in 15 years.”
Maryland: (Hearth, BBQ) “Rain, Rain Go Away! When the sun shines so do the sales.”
Massachusetts: (Hearth, Patio, BBQ) “On Cape Cod, we usually don’t start getting warm weather ’till June. This spring has been unusually cool all around. As a result, it has delayed customers from thinking about patio or barbecue products. They were still using their hearth products to stay warm! I can already see a rise in traffic for outdoor products during this first week of June.”
New York: (Hearth) “As the winter was sooo bad, so goes the spring. Our business is off by more than 50 percent. This is not our first bad spring and more than likely it will not be our last. We will hang in and do some advertising in the late summer and hope for a cold winter.”
New York: (Hearth, BBQ, Spas) “Hearth products remained steady with warmer spring weather. Selling a lot of wood pellets with the new competitive pricing being offered.”
Pennsylvania: (Hearth, Patio, BBQ) “Mother Nature still has not made up her mind, which is bad enough, then add in a slow recovery from a winter that really never happened. As far as grills and patio are concerned, the market is completely saturated with cheap imported products.
“There are more than 22 retail locations (Big Boxes, discount department stores, appliance stores and furniture stores) all selling the same cheap, imported products in my area. You don’t have to wonder why consumers are the way they are!”
Pennsylvania: (Hearth) “We are flat for our fiscal year (11 months) in sales dollars. Gas fireplaces and inserts are up 35 percent, but profit is up eight percent.”
Pennsylvania: (Hearth, Patio, BBQ) “Fireplace sales for new construction and remodeling are stronger than last season. Outdoor products have moved better. This helps to make up for the low wood, coal and pellet stove sales.”
Weather Report
For the following weather charts, the numbers for each state reflect the temperature ranking for the period since records began in 1895.
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Washington state led the way as the state with Much Above Normal temperatures. Thirteen other state experienced Above Normal weather, while the rest of the country was at Near Normal or Below Normal temperatures. |
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For the three-month period March, April and May, the entire country was at Above Average or Much Above Average temperatures. |
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With the exception of Virginia which posted Much Above Average precipitation in the month of May, all other states were at the unremarkable levels of Below Average, Near Average or Above Average. |
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South
Arkansas: (Hearth) “Another really slow retail month – no floor traffic or phone calls all month! People are just not looking for hearth products this whole year. YTD sales are off 60 percent – hardly worth turning on the lights.”
Louisiana: (Hearth) “More and more customers have outdoor kitchens and large sitting areas, thus wanting an outdoor fireplace in it. Lots of outdoor hearth products being requested.”
Oklahoma: (Hearth) “Weather just now getting hot. Sales may be slowing.”
Tennessee: (Hearth, BBQ) “Very disappointing month. Nothing to blame it on except myself, but God forbid, we ain’t doing that!”
Texas: (Hearth, Patio, BBQ) “$40 a barrel of oil, two Memorial Day floods two years in a row, plus the Tax Day flood in April – Lord, what did we do wrong?”
Texas: (Hearth, Patio, BBQ) “May was extremely wet again this year in North Texas, only nine days with no moisture. Many planned projects are again behind schedule for this spring.”
Midwest
Michigan: (Hearth) “Internet hurting sales. Cheap customers. Harder to sell American-made. Harder to sell quality. Better get better or get eaten up by Internet sales!”
Michigan: (Patio, BBQ) “It would seem that consumers are trending toward more quality products this season. Still many special orders at this time, even though we have a vast inventory of in-stock items.”
Missouri: (Hearth, BBQ) “Stronger than usual sales for fireplaces on new construction projects. New home builds are increasing in our area. Very welcome because the mild winter impacted wood-burning stoves negatively.”
Missouri: (Hearth, BBQ) “Seeing an increase in outdoor fireplaces/fire pits. Also seeing a large increase in custom and higher-end gas fireplaces. Many factors are contributing to the large increase for May and this year overall, and I don’t expect this kind of increase to last. But overall, the past three years have had a gradual curve upward (with a recent large spike over the past several months) resulting in the best May since the economic downturn.”
Nebraska: (Hearth, Patio, BBQ) “It was a real crappy, rainy month here in the Midwest and it killed traffic.”
Ohio: (Hearth, BBQ) “Finally, grills sales started to pick up. In-ground post mount natural gas grills were just collecting dust in the back room until the middle of May. Went through more than half of the stock in two weeks. Some big hearth remodeling projects were sold too. Hoping this sales trend continues through the rest of the election year.”
Wisconsin: (Hearth, BBQ) “Sales are down this month, but there is a fair amount of booked advanced work. The total sales for this year, so far, are up.”
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A reading above 90 indicates the economy is on solid footing; above 100 signals strong growth. The Index is based on a probability-design random sample conducted for The Conference Board by The Nielsen Company. The Index is based on a probability-design random sample conducted for The Conference Board by The Nielsen Company. |
West
Arizona: (Hearth) “Cold, wet weather definitely helps bring in new customers.”
California: (Hearth, Patio, BBQ) “May started slow but ended strong with a flurry of Memorial Day grill sales.”
Colorado: (Hearth) “April, May and first half of June in Colorado for hearth is always flat. But not worried, we are still busy enough and grateful for it. We start ramping up the clockwork third week of June and it looks promising.”
Colorado: (Hearth, BBQ) “Lots of new construction!”
Utah: (Patio, Spas) “Good weather equals good sales.”
Washington: (Hearth, Patio, BBQ, Spas) “April was so slow, we ran a sales mailer to our customer base and had a huge positive response.”
Canada
British Columbia: (Hearth, Patio, BBQ, Spas) “May was very inconsistent traffic-wise. Overall sales up seven percent over a very good 2015, so the trend is positive. After a fantastic early spring, barbecue sales slipped but everything else was up.”
British Columbia: (Hearth) “A lot of wood insert sales and interest which is unusual. 2016 equals slightly more appliances, 2015 equaled slightly more venting.”
Nova Scotia: (Hearth, BBQ) “Very busy month for barbecues.”
Ontario: (Hearth, Patio, BBQ) “Grills down a lot. We cannot get our Vermont Casting grills.”
Ontario: (Hearth, Patio, BBQ) “When May of last year was the number-one worst month we ever had, being up four times in sales is still not enough to even wake up from my nap. Price cutting is getting way out of hand. I always thought when there were fewer consumers the price should be held higher to obtain the fewer jobs at a higher profit level.
“How do these guys expect to make any money when they have both fewer customers and lower profit margin? Screw WETT certification and technical training. Some retailers need a course in effective money management and fiscal responsibility. Look out, here come the rocks – was this really an industry or are we just fooling ourselves?”
Ontario: (Hearth, Patio, BBQ) “We have a lazy economy right now when it comes to patio furniture. Potential customers buying cheap offshore products from Box stores.”
Ontario: (Patio, BBQ) “I’m not sure why, but have had a real increase in customers wanting upscale products. Special orders are up considerably.”
Ontario: (BBQ) “The weather has improved and so have sales. 2016 could be our best year ever. Most of the barbecues going to the recycle bin are only three to four years old. Cheap imports are no bargain.”
Quebec: (Hearth, Patio, BBQ, Spas) “When the weather is good, sales are good!”
Saskatchewan: (Hearth, BBQ) “Economy is tight. Showroom traffic is slow.”
Stock Watch
| COMPANY – EXCHANGE | SYMBOL | 52 WEEK | Week Ending | % CHANGE | MARKET CAPITALIZATION | ||||
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| High | Low | 29-APR-16 | 27-MAY-16 | 4 WEEK | 26 WEEK | 52 WEEK | ($000,000) | ||
| HNI Corporation (a) | HNI | 53.75 | 29.84 | 43.72 | 45.82 | 4.8% | 1.9% | -5.5% | $2,120.0 |
| Pool Corporation (b) | POOL | 94.60 | 65.56 | 87.41 | 92.43 | 5.7% | 11.5% | 39.5% | $3,890.0 |
| Rentech (b)(e) | RTK | 12.00 | 1.55 | 3.47 | 2.48 | -28.5% | -12.7% | 110.2% | $59.0 |
| Restoration Hardware Holdings (a) | RH | 106.49 | 30.83 | 43.27 | 33.54 | -22.5% | -64.1% | -63.1% | $1,380.0 |
| Wayfair, Inc. (a) | W | 56.84 | 28.85 | 37.75 | 40.80 | -8.1% | -6.9% | 36.5% | $3,560.0 |
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(a) = New York Stock Exchange |
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