Jerry Epperson speaks to High Point Market attendees during his bi-annual “State of the Industry” presentation.
HIGH POINT – Jerry Epperson believes the underlying economy is not as bad as people think.
“This is the first recession we’ve had in 10 years, but the core is still growing.” Epperson, the managing director of Mann, Armistead & Epperson, shared his thoughts on this topic and many others at the HFA Retailer Resource Center during his regular High Point Market “State of the Industry” presentation via Zoom.
According to Epperson, housing starts are growing while mortgage rates are rising. “Consumers have better finances than they have had in a long time,” he said.
During the pandemic, Epperson said consumers have gotten even more casual than in previous decades and stores need to follow this trend with visual maintenance that speaks to what customers are looking for.
When it comes to the supply chain, “The logistics aren’t getting better,” he added. “The major ports can’t create enough space for the containers, so the product ends up waiting in Asia.”
Back in 1964, the average container ship held 1,000-1,500 containers, Epperson said. Now that number is up to 19,000 for many ships. Due to their immense size, only certain ports can accept these huge ships.
“But vendors who use smaller ships aren’t having problems using smaller ports such as Savannah, Ga. and Wilmington, N.C.,” he said. “Over time, I believe container costs will come down some.”
Also, several new apps have sprung up during the supply chain issues that inform retailers and designers about product that is available. “If you can’t get your product on time, shop somewhere else,” he recommended.
Epperson said the annual growth for this year should be around 3% overall with retail growth at 5%. “Although it’s less than last year, it’s still growing at a decent pace,” he said.
One other bright spot is that the population base of 35-to-54-year-olds, a key furniture buying demographic, started growing in 2017 and will continue to grow until 2034.
A hot topic with this demographic is the idea of recycled furniture, not antiques per se, but furniture that can have an extended lifespan, something manufacturers might consider capitalizing on.
Epperson also believes that the labor shortage will get easier with artificial incentives running out and people going back to work. Also, there is more credit available now than at any time in the past, according to Epperson. “Credit is no longer through the banks,” he said. “Private equity is funding consumer debt programs in the home furnishings and auto industries.”
Designers now make up 40-50% of attendees at the High Point Market when at one time they weren’t allowed to attend. “Consumers know more about decorating but don’t have time,” he said. “Manufacturers should recognize the increasing importance of designers.”