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Hearth & Home March 2020

2020 January Business Climate


January Sales

In early February, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, patio, and barbecue products, asking them to compare January 2020 sales to January 2019. The accompanying charts and selected comments are from the 219 useable returns.


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Weather Report

Consumer Confidence

Stock Watch


MONTH-TO-MONTH

RETAILER SALES – U.S. AND CANADA
January 2020 vs. January 2019

In January, 49% of Hearth retailers were UP over the prior year, while both Patio and Spas were UP 25%, and Barbecue retailers were UP only 16%.


13 MONTH YEAR-OVER-YEAR RETAILER SALES
January 2020 vs. January 2019

In January, both Hearth and Patio sales were UP 4%, while sales of Barbecue products were UP 1%, and sales of Spas were DOWN 1%.



Retailer Comments

Northeast

Maine: (Hearth, Patio, BBQ) “New construction has kept us busy with new gas fireplace installations.”

Maine: (Hearth, Patio, BBQ) “In previous years, January is generally a recovery month from a holiday spending-hangover, however this January charged ahead and outpaced 2019. Renovations and retro fits continue to lead the way in our corner of the hearth industry.”

Massachusetts: (Hearth, BBQ) “Some of January’s increase was based on carry-over from December’s deposits. We had a couple of unexpected sales in January of barbecue products. We are coming off a good 2019 year and are optimistic of a good 2020. Thanks for your efforts.”

New Jersey: (Hearth, BBQ) “Not cold, but still good selling; people are spending money $$.”

New York: (Hearth, Spas) “The only way to explain an unusually busy January for hearth products is to credit the burgeoning economy, as the winter weather has been so mild. We are considering a complete showroom remodel, and eliminating the grills, patio furniture, and accessories, and expanding our hearth display.

“I am sick and tired of jockeying with the Internet, and the Big Box boys over kamado and gas grills and patio furniture, and all the accompanying accessories. We simply can’t compete, and we cannot exist on a 20% to 30% gross margin. You can get a Big Green Egg kamado grill on Amazon for $299.99.

“Yeah, it’s a knock-off, but customers don’t get that. Going forward, we will heavily market those items that require our skills and knowledge to deliver/install – such as gas, pellet, and wood stoves and inserts. Looking forward to folks getting their big juicy tax return checks next month!”

New York: (Hearth) “Our store is located between Home Depot and Lowe’s and our lack of sales confirms that. Our business is also affected by weather and online shopping. Many homeowners in our area purchase a unit online and then when they have problems look to us for service. It brings our service revenue up, and for that we are grateful, but we lost the original sale. Our pellet sales are also down because we cannot compete with the large Box stores’ pricing. Like many Mom-and-Pop stores, we are feeling the pinch.”

New York: (Hearth) “Sales have been down, not sure if it’s because of the weather. Customers also keep trying to compare our products to Big Box stores’.”

Pennsylvania: (Hearth, Patio, BBQ) “Last year our January was exceptional. This year it’s down 4%. We will take it; it could have been, and has been, worse.”

Pennsylvania: (Hearth) “December sales were down due to weather and labor shortages. Work was completed in January. Our fiscal year from July 1, 2019, to January 31, 2020, is up 7% from last year, which was our best ever.”


Weather Report

For the following weather charts, the numbers for each state reflects the temperature and percipitation rankings for the period since records began in 1895.

In January, 21 states recorded Much Above Average temperatures; the rest of the country experienced Above Average temperatures.

For the three-month period November – January, four states (Washington, Oregon, Idaho, and Wyoming) experienced Much Above Average temperatures; the rest of the country was at Above Average temperature.

In January, five states (Washington, Oklahoma, Missouri, Illinois, and Mississippi) recorded Much Above Average precipitation, while two states (Massachusetts and Rhode Island) were at Much Below Average.

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South

Arkansas: (Hearth) “Better retail month than expected, with weather issues all month long slowing business down.”

Louisiana: (Hearth) “Our merchandise sales were down 12%. However, our service business was up to give us an overall 5% increase in income.”

Oklahoma: (Hearth) “2020 same as 2019. Good month for both years.”

South Carolina: (Patio, BBQ) “Last January was dismal. This year it’s back up where it should be. Actually, it was quite a bit better than average.”

Texas: (Hearth) “We had extreme amounts of rain that kept building or remodeling down. When we usually have sun and mild weather in our coastal area we had rain and several cool or cold and windy days. High winds and flooding also kept shoppers in.”

Virginia: (Hearth, BBQ) “Very busy and sold all products. Sell, sell, sell, and sell. February on the East Coast 66ºF outside; what happened to winter?”

Virginia: (Hearth) “January sales were a little slow at the start. But, by the second week of January, they took off again. Sales wound up to be 5% higher than January 2019.”

Midwest

Iowa: (Hearth, BBQ) “I don’t think the decrease in sales is because of a lack of demand. Our efforts declined in sales and were diverted to office and managerial duties. Let’s see if we can hit last year’s numbers for February!”

Iowa: (Hearth, Patio) “January this year was not as cold as normal in Iowa. In fact, it was quite a bit above normal temps.”

Illinois: (Hearth, Patio, BBQ) “Sales in grills were down a lot, but that was due to one of our manufacturers having a price increase at the end of last January. So we sold a lot of kitchens in January of 2019!”

Minnesota: (Hearth, BBQ) “Our 2019 sales were very good, resulting in a larger project carry-over into 2020.”

Ohio: (Hearth, BBQ) “Barbecue products in Ohio in January are not real hot sellers even with the exceptionally mild winter that we’ve had. That said, hearth products are up over last January (which was our best ever) by 35%. Obviously some of that is carry-over from year-end projects that didn’t quite hit the books by year’s end, but we are still sending out quotes for new fireplaces and installing new products almost every day! Service has been robust as well; looking forward to our full-time technician hitting the road, and that will only help our growth! It’s an exciting start to a big year for us!”

Ohio: (Hearth, BBQ) “January sales started off rather flat. The last 10 days or so we were able to land some rather solid hearth projects that will close out in the lean months of the first quarter. That will be a tremendous help to cash flow.”

Wisconsin: (Hearth) “Very strong new construction market. Retail market is steady.”

Wisconsin: (Hearth) “The start of the year has been great for us! We have been swamped with installations and estimates for future installations. Right now, we are about two months out.”

Wisconsin: (Hearth, Patio, BBQ) “Overall a bit down but not terrible. Last January was a good month. Weather seems to be playing a bit of a game with us as it isn’t as bitterly cold as it was last year. Thirty-eight degrees this year where it was a -38ºF last year. Balmy January, actually.”

Wisconsin: (Hearth, Patio, BBQ) “Very busy, installs out six to eight weeks. New construction is way up, never slowed down from last summer. First time ever turning down big jobs. Expensive fireplaces are selling well. Customers are perceiving value with price. Never seen this much activity in hearth sales in 31 years. Not enough time in a day. Gas sales are strong, wood is steady, electric is picking up.”


Consumer Confidence

The Consumer Confidence Index increased in January, following a moderate increase in December. The Index now stands at 131.6 (1985=100), up from 128.2 (an upward revision) in December.

“Consumer confidence increased in January, following a moderate advance in December, driven primarily by a more positive assessment of the current job market and increased optimism about future job prospects,” said Lynn Franco, senior director, Economic Indicators, at The Conference Board. “Optimism about the labor market should continue to support confidence in the short-term and, as a result, consumers will continue driving growth and prevent the economy from slowing in early 2020.”

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.

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West

California: (Hearth, Spas) “January was very busy for us because, unlike October, November, and part of December, we finally started having a winter. Hopefully it will continue into the spring months. Looks like it might be a good spa year.”

California: (Hearth) “Our business has grown 300% over the past two years, so I don’t think it accurately reflects exactly how the market is going. Out of my local competitors, one of them is doing great and growing, and a couple others are on the decline.”

California: (Hearth, BBQ, Spas) “The weather is cooperating this year and we are able to install stoves. We are still busy with repairs, and noticed that people are trying to limp their stoves along for another year or two before replacing. I have customers holding out and hoping for a change-out in the area.”

Colorado: (Hearth, Patio) “Our net income was up 3%, which met our goal for the quarter.”

Oregon: (Hearth) “Sales dropped off considerably after the holidays. This is typical for this time of year. Quiet into February, hope it will change.”

Oregon: (Hearth) “We are heavy wood-focused and going against the grain by selling our heavy stockpile of pre-2020 stoves because there is a strong demand.”

Wyoming: (Hearth, Patio, BBQ) “Our growth is a result of our new store location and showroom. Our grand opening was September 2019. I expect we will see year-over-year growth all this year.”

Canada

British Columbia: (Hearth) “Pellet fuel sales are up slightly. Sales are stagnant and enquiries are down somewhat for hearth.”

British Columbia: (Hearth, BBQ) “Steady hearth business with steadily increasing chimney sales.”

Manitoba: (Hearth, Patio, BBQ) “In January we are always down, quite normal. As far as barbecues, well, the factory we have been purchasing from has started to sell their product to every Tom, Dick, and Harry, so it makes it a bit tougher. Hearth products are our best sellers all around; they do quite well.”

New Brunswick: (Hearth, BBQ) “Found traffic and sales to be lackluster.”

Nova Scotia: (Hearth, Patio, BBQ) “Many new constructions and renovations.”

Ontario: (BBQ) “January is always the worst month of the year. This year – a little worse than usual. After inspiration and perspiration – the third way to success must be optimism.”

Ontario: (Hearth) “New-home sales were strong in January. Still lots of service calls for older fireplaces.”

Ontario: (Hearth, BBQ) “I think this might be the no change/BS-type month that will convince me to retire. Go ahead, make me an offer. Nobody wants to lift wood stoves; gas installers are not worth what they demand, and the customer is always right.”

Ontario: (Patio, BBQ) “January sales are too low for stats to be meaningful. However, we did have a few good patio sales this month.”

Quebec: (Hearth, Patio, BBQ, Spas) “Very good month of sales for wood products with big tickets.”


Stock Watch

COMPANY – EXCHANGE SYMBOL 52 WEEK Week Ending % CHANGE MARKET CAPITALIZATION
    High Low 3-JAN-20 31-JAN-20 4 WEEK 26 WEEK 52 WEEK ($000,000)
Standard & Poor’s 500 (a) S & P 3,320.79 2,744.45 3,234.85 3,225.52 -0.3% 10.0% 19.2%  
HNI Corporation (b) HNI 42.23 29.90 37.21 35.97 -3.3% 8.8% -6.1% $1,610.00
Pool Corporation (c) POOL 228.19 148.36 215.04 219.30 2.0% 16.1% 44.6% $9,080.00
Restoration Hardware (b) RH 243.67 84.11 209.40 208.75 -0.3% 52.6% 56.2% $4,100.00
Wayfair, Inc. (b) W 173.72 78.61 94.04 93.70 -0.4% -26.4% -14.8% $9,250.00

NOTES:

(a) = Standard & Poor’s 500 is based on the market capitalizations of 500 large companies having common stock listed on the NYSE or NASDAQ. It is considered one of the best representations of the U.S. stock market, and a bellwether for the U.S. economy.
(b) = New York Stock Exchange
(c) = NASDAQ

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More Industry Data

2020 February Business Climate

In early March, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, patio, and barbecue products, asking them to compare February 2020 sales to February 2019. The accompanying charts and selected comments are from the 186 useable returns.

» Continue

2019 December Business Climate

In early January, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, patio, and barbecue products, asking them to compare December 2019 sales to December 2018. The accompanying charts and selected comments are from the 216 usable returns.

» Continue

2019 November Business Climate

In early December, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, patio, and barbecue products, asking them to compare November 2019 sales to November 2018. The accompanying charts and selected comments are from the 194 usable returns.

» Continue

2019 October Business Climate

In early November, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, patio, and barbecue products, asking them to compare October 2019 sales to October 2018. The accompanying charts and selected comments are from the 209 usable returns.

» Continue

2019 September Business Climate

In early October Hearth & Home faxed and emailed a survey to 2,500 specialty retailers of hearth, patio, and barbecue products, asking them to compare September 2019 sales to September 2018. The accompanying charts and selected comments are from the 194 usable returns.

» Continue