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Hearth & Home June 2020

2020 April Business Climate


April Sales

In early May, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, patio, and barbecue products, asking them to compare April 2020 sales to April 2019. The accompanying charts and selected comments are from the 234 useable returns.


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Weather Report

Consumer Confidence

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MONTH-TO-MONTH

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

It’s tough to grow a business when customers aren’t allowed into the store. Yet, 33% of Spa retailers were UP in April; 20% of Barbecue retailers were UP; 11% of Hearth retailers were UP; and only 4% of Patio retailers were UP. It appears that many homeowners were smart enough to barbecue a good meal prior to relaxing in the hot tub.


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

In April, sales of Patio products were Down -45%, sales of Hearth products were Down -36%; sales of Barbecue products were Down -17%, and sales of Spas were Down -13%.



Retailer Comments

Northeast

Connecticut: (Hearth, BBQ) “We never shut down completely and, as a result, our company continued to do business while many others didn’t. We answered the phones five days a week and wrote sales and future service for when the ban is lifted. I expect that our company will remain busy leading up to and continuing through our next busy season in the fall and winter.

“As far as I know, our industry has always been considered essential to our customers, our business, and our families, I was not going to watch that heritage get wiped out by staying home and closing our doors, even temporarily.”

Maine: (Hearth, Patio, BBQ) “Showroom is closed and only selling essential products.”

New Jersey: (Patio, BBQ, Spas) “May is going to be huge.”

New York: (Hearth, Spas) “Hopefully this virus will move people to more home improvement projects so that they are more comfortable at home when the next pandemic comes around. I personally think it is terribly overblown and I do not like the government telling me I have to close my business, stop my construction, wear masks and gloves, and stay home in my small, rural county with no COVID-19 cases. Eight weeks with absolutely no income, but still overhead costs to pay. I wonder how many of us will go belly up after it all washes out?”

Pennsylvania: (Hearth, Patio, BBQ) “In the midst of chaos there is opportunity.” Sun Tzu.

“In the span of less than 20 years our country has gone through 9-11, 2008 Recession, and now Pandemic 2020. Each time our company has reinvested in the future, this time is no different. During the closure of our business, we have maintained our responsibilities and obligations to our employees, customers, and business partners. We also took the opportunity for maintenance and renovation projects on our facility.”

“Lastly, we are continuing the planning of our capital project, including a new warehouse and renovation of our existing building, expanding more showroom and office space.

“Control your own destiny or someone else will.” Jack Welch.


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 April, Florida experienced Much Above Average temperatures; seven western states were at Above Average temperatures, while the rest of the country experienced Near Average or Below Average temperatures.

For the three-month period February – April, Florida set Record Warmest temperatures; Idaho and Wyoming were at Near Average, and the rest of the country was at Much Above Average or Above Average temperatures. It was warm!

In April, Georgia, Virginia, and West Virginia saw Much Above Average precipitation, while Washington, Colorado, and Nebraska were at Much Below Average precipitation.

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South

Alabama: (Hearth, Patio, BBQ) “Due to the coronavirus, we were forced to be closed from March 20 until May 1, 2020.”

Arkansas: (Hearth) “Just set a new monthly retail sales record this month: lowest sales in 24 years of business! Pretty sad month - four customers and $40 in total sales over five weeks of business. Afraid to think about May business.”

Florida: (BBQ) “People are sheltering at home and need new grills.”

Florida: (Patio) “Closed (like all other retail stores) the entire month of April. We were able to move our poly inventory (C.R. Plastic Products and Berlin Gardens) to a large landscape nursery that was deemed necessary. We gained several thousand feet of display area and this worked well.

“We posted Live Facebook videos three times a week; offered Happy Store gift bags with assorted merchandise according to hobbies (beer, wine, cats, dogs, flowers, birds, brands, etc.) $35-$125 with local ‘no touch front door delivery’ for $5. Shipped the bags as well. Our website became an e-commerce site. Ran CRP at an additional percentage off. Did not have to furlough any employees.”

Georgia: (Patio) “We do sell playsets at our outdoor furniture store and our sales have been astronomical with playsets. We are out of stock and nationwide stores are also out of stock.”

Louisiana: (Hearth) “The numbers in the survey do not reflect our service business. When I factor that in, our April is only down 12% and our YTD is only down 3.7%. While our showroom is closed, it has hurt our hearth product sales; however, our service business is gladly pulling the weight. The service I’m referring to are installations, chimney sweeping, and repair. In talking with customers during these routine services we have gladly picked up other masonry work, power washing, and house painting. We are grateful for this work.”

North Carolina: (Hearth, Patio) “Closed March 26 to May 8 by government order.”

Oklahoma: (Hearth, BBQ) “April was surprisingly better, with shortened hours and all due to the pandemic. But since January and February were so soft, April felt like a rally in sales. March was slowed by weather, then by pandemic. We are easing out of the hearth business and mostly do custom stuff so may do nothing at all then sell some expensive fire pit or Eiklor custom set.”

Texas: (Hearth, Patio, BBQ) “Gas grills and ceramics slow. Pellet grills are selling.”

Virginia: (Hearth) “Except for some new home construction, everything came to a screeching halt sales-wise. Some service work. But we are being very careful entering homes due to the pandemic. Have filed for a small business loan. But, as yet have not received a yea or nay on it. Here in Virginia, the governor sees hope for loosening things up a bit by mid-May. That’s if the number of positive cases of the flu and the death rate level out. Although I’m saddened by what’s been happening, I’m not angry about it. Being a volunteer medical first responder, I understand the situation completely.”

Virginia: (Hearth) “We were having a banner year until the virus hit. We closed the shop down on March 20 and employees went on unemployment. We didn’t because we applied for PPP loan; that never came through. We tried to file for unemployment, their system has a glitch and that won’t go through. The $1,200 stimulus hasn’t come through. We had money in the bank before the virus hit, but that started getting scary last week. We came up with a promotion, contacted some customers that had been on the fence, told them we’re having a sale and we warned them (after confirming in talks with manufacturers) that since fireplaces use components made worldwide, and they’re already having problems getting these components to build out fireplaces, that getting any fireplace once fall comes may not be possible.”

Midwest

Illinois: (Patio) “We have been closed since March 13. We continue to follow-up on leads and quotes. I have to say we are doing better than I would have predicted going into April. We have closed many of those quotes going back to the fall. We have really bumped up our Social Media and have garnered lots of leads from that. Fortunately, we have been able to convert a good amount of those. Amazing how our staff has been able to pivot into doing FaceTime and Virtual Showroom tours. We don’t open the state until June so we will be continuing what we have done for the last couple months now. Or is it six months? It’s all a blur.”

Indiana: (Patio, BBQ, Spas) “I’m sure people are in the process of starting the staycation for this year because of the COVID-19 virus, and this has started the buying process it appears in the spa and pool side of our business. Our stores have been closed to regular foot traffic but we are scheduling appointments for the big ticket items and offering curbside service for chemicals, pellets, charcoal, and water samples. That is going much better than we had anticipated now that it’s warm. We also offer delivery on all purchases over $250 in our normal delivery range, and that is also doing well.”

Michigan: (Hearth) “We have been closed due to COVID-19 pandemic, with myself doing phone messages and emails. We do have a lot of installs, service, and home reviews to do once we can open. Waiting on our Michigan governor’s orders.”

Michigan: (Hearth, BBQ) “The business climate is just fine. Most of my customers
are ready to buy. But it’s the total over-reach of the government that has arbitrarily shut down small businesses, picking winners and losers. The saddest part is that my children and grandchildren will be paying for this for the rest of their lives.”

Missouri: (Hearth, BBQ) “It has been a year like none other. Hearth products have been soft all year with the mild winter, then followed by the dreaded COVID-19. Late winter and early spring produced a lot of wet, soggy weekends that are notoriously bad for barbecue sales. However, April has had some good weather yielding some excellent sales in barbecue grills. Many people are choosing to cook at home outside. We are optimistic for the future as long as America can get back to work soon.”

Ohio: (Hearth, BBQ) “Being able to qualify as essential by our state helped us remain open. Our staff was offered unemployment but all chose to keep working. This allowed us to keep our stores open and go after whatever sales and service we could. I couldn’t be more proud of our staff. We’re really hoping we can get the economy in full recovery mode before the heating season hits.”

Wisconsin: (Hearth) “New construction sales continue to be strong. Surprising number of inquiries about retail sales. Just began soft opening by appointment with limited staff on hand.”

Wisconsin: (Hearth, BBQ) “Surprisingly busy in April. Because we’re the pellet stove store, we’re considered essential. At our four Wisconsin locations we have plexiglass barriers at counters and we sanitize constantly; our customers seemed to appreciate our efforts.”


Consumer Confidence

The Consumer Confidence Index deteriorated further in April, following a sharp decline in March. The Index now stands at 86.9 (1985=100), down from 118.8 in March. The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – also declined considerably, from 166.7 to 76.4. However, the Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – improved from 86.8 in March to 93.8 this month.

“Consumer confidence weakened significantly in April, driven by a severe deterioration in current conditions,” said Lynn Franco, senior director of Economic Indicators at The Conference Board. “The 90-point drop in the Present Situation Index, the largest on record, reflects the sharp contraction in economic activity and surge in unemployment claims brought about by the COVID-19 crisis.

“Consumers’ short-term expectations for the economy and labor market improved, likely prompted by the possibility that stay-at-home restrictions will loosen soon, along with a re-opening of the economy. However, consumers were less optimistic about their financial prospects and this could have repercussions for spending as the recovery takes hold. The uncertainty of the economic effects of COVID-19 will likely cause expectations to fluctuate in the months ahead.”

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) “For the moment we live in a ghost town! Our staff has gone from 10 to two employees and we are only open on a limited basis. So far we have not been forced to shut down. Sales are off at least 60% and we consider ourselves lucky/blessed. Fight your way through it; it will pass!”

California: (Hearth, Patio, BBQ, Spas) “April invoiced activity was not as bad as we thought it would be; it was only down 11% total. While invoiced activity was down, orders were actually up 25% with spas being up 500%.”

Colorado: (Hearth) “Showroom is closed but we are doing very well working with customers via phone, text, and email.”

Washington: (Hearth, BBQ) “Hearth is down and barbecue is up, which is to be expected with COVID-19 and customers in lock down.”

Canada

British Columbia: (Hearth, BBQ) “COVID-19 has forced us to close our showroom. We are here taking calls but customers are not calling our store very much for hearth or barbecue. They are either shopping online or not spending at all. We hope this doesn’t spill into the fall heating season.”

British Columbia: (Hearth) “Pellet fuel sales are steady, but little interest in other hearth products.”

Ontario: (BBQ) “As a result of COVID-19 we have scraped our original advertising and revised everything to promote the following: Dining in is now IN, and dinner choices are endless on a barbecue. Sales presentations are now by appointment only and every unit is set up, washed, and delivered.”

Ontario: (Hearth, BBQ) “COVID-19 has all four of my showrooms closed and only essential projects continue. Curbside and delivery of barbecue is helping but not like a regular spring.”


To read all comments from retailers, click here.


Stock Watch

COMPANY – EXCHANGE SYMBOL 52 WEEK Week Ending % CHANGE MARKET CAPITALIZATION
    High Low 3-APR-20 1-MAY-20 4 WEEK 26 WEEK 52 WEEK ($000,000)
Standard & Poor’s 500 (a) S & P 3,386.15 2,237.40 2,488.65 2,830.71 13.7% -7.7% -3.9%  
HNI Corporation (b) HNI 42.90 16.61 21.80 23.21 6.5% -39.8% -38.0% $990.00
Pool Corporation (c) POOL 283.23 160.35 178.27 216.02 21.2% 4.3% 17.1% $8,630.00
Restoration Hardware (b) RH 256.27 73.14 86.19 137.46 59.5% -21.8% 26.3% $2,640.00
Wayfair, Inc. (b) W 166.40 21.70 50.63 122.50 142.0% 46.3% -17.7% $11,560.00

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 May Business Climate

In early June, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, patio, and barbecue products, asking them to compare May 2020 sales to May 2019. The accompanying charts and selected comments are from the 229 useable returns.

» Continue

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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

2020 January Business Climate

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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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.

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