Mattress concerns; stores: consolidation key in ’98

Mattress merchants have a lot on their minds when heading into the new year.

Bedding and full size futon mattress retailers from all channels report that industry consolidation will continue as the most pressing issue throughout 1998, although vendor relations, product distribution and advertising strategies will remain significant challenges.

Dan Murphy, bedding buyer for Little Canada, Minn.-based Slumberland, echoed the thoughts of many retailers: "The issues aren't really different than they have been, but they are more intense now."

Gerry Borreggine, president of West Berlin, N.J.-based 40 Winks, agreed that certain challenges are intensifying because of industry consolidation and competition.

"The biggest change is the consolidation that is occurring in the industry at the retailers, manufacturers and suppliers levels," he explained. "The bedding industry has been a rather localized, regionalized business up until this time; now it is taking more of a national posture."

For example, retailers predict the full impact of Heilig-Meyers' strategy to expand its bedding business will be felt in 1998. (The nation's largest furniture retailer intends to build its bedding business within its furniture stores through Internet sales and by expanding its Mattress Discounters stores through acquisitions of regional sleep shops.)

Apart from Heilig-Meyers, an increasing number of retailers are exploring ways to maximize their bedding business through telephone and Internet sales, and the most notably one is the New York-area regional powerhouse.

Mattress concerns

Meanwhile, strong regional sleep and full futon shop chains such as Mattress Giant and Sleep Train continue to grow, putting pressure on the smaller chains and independent furniture dealers.

All this consolidation and competition for the consumer dollar "places a higher priority on the dynamic of vendor/retailer relationships," added Borreggine.

"Retail consolidation can be positive or negative for the industry -- it depends on the results of that consolidation. If it leads to more advertising and a stronger presence in the marketplace, it could turn out to be good," commented Slumberland's Murphy. "The biggest challenge we have is to draw a greater attention to the category versus other consumer goods and services."

The key, according to Robert Killgore, vice president of sales for Sleep Train, is "finding the balance in our retail pricing in order to be competitive in each market, while providing profitable margins for both us and our vendors."

In fact, the retailer continued, the competitive environment can be an advantage. "We have to decide how to best take advantage of the tremendous opportunities opening up with the rapidly changing vendor-retailer relationships in the bedding industry in general, and the sleep and full size futon size futon mattress shop channel of distribution in general."

Retailers are also challenged by aggressive manufacturers who, in addition to seeking greater market share through conventional retail channels, are also looking to factory direct, telephone and Internet sales as ways to increase business.

Manufacturer distribution is another concern for some retailers. Several said that to remain competitive in their markets, they need more exclusive products and not so many brands in the marketplace.

"Distribution is a big concern and will continue to be a problem," noted one retailer, who added that it can affect every facet of the business, including manufacturer relationships, advertising and pricing.

Another retailer mentioned problems with a vendor who sells to a competitor, in this case, a discounter: "We have a lot of customers shopping our stores for information on the beds, and then buying from the discounter. If the discounter couldn't use our store for educating the customer, they wouldn't sell 25 percent of what they do."

Yet, in spite of the challenges ahead, many are optimistic about the future of their businesses. Several retailers said their greatest challenge for the coming year is to determine where and when to expand.

"My only real issue is the continued economic health of our market area -- everything else I can control. Business has never been better," reported one retailer.

Read other articles:


Evelyn Coursey

Someone may think that home décor is time-wasting but to me - Evelyn Coursey – it is my passion and futon is my favorite thing! So, do not hesitate anymore, let’s hurry up and find interesting information about these things!

Click Here to Leave a Comment Below 0 comments

Leave a Reply: