Wayfair: Home Furnishings Sales Slow to 2008 Crisis Levels

Wayfair saw its quarterly sales dip amid continued pressure on home goods consumers.

“Customers remain cautious in their spending on the home, and our credit card data suggests that the category correction now mirrors the magnitude of the peak to trough decline the home furnishing space experienced during the great financial crisis,” Wayfair Co-founder, Co-chairman and CEO Niraj Shah said in a Thursday (Aug. 1) news release.

The company’s second-quarter earnings showed total revenues dipping 1.7%, with U.S. revenues down 2%. Wayfair also saw a 2.9% decrease in the number of orders delivered, as well as a 2.4% decrease in orders by repeat customers.

The retailer’s average order value in the quarter came to $313, up from $307 during the same quarter last year.

These results come as consumer spending remains strong — in spite of inflation — though there are concerns about credit card delinquencies and lenders’ net charge-offs.

As PYMNTS reported, the resilience of consumer spending is also seen in J.P. Morgan’s latest earnings, which showed strong card spending in both debit and credit payments.

Credit card loans rose 13% year on year, with debit and credit card sales volumes up 7%. J.P. Morgan CFO Jeremy Barnum said that there has been little impact from spending shifts in an inflationary environment.

However, credit card delinquency rates have climbed to a nearly 12-year high. The share of credit card balances that are past due is at its steepest level since 2012, a sign that people are struggling to pay down their credit card debt, even as many consumers trim their spending.

Meanwhile, PYMNTS wrote in June about the desire among consumers for brick-and-mortar options when buying home furnishings, and the way Wayfair and other retailers are responding to those wishes.

Research by PYMNTS Intelligence finds that 53% of consumers prefer to make home furnishing product purchases in stores, compared to just 25% who said they would rather buy these furnishings online.

To accommodate that 53%, Wayfair recently announced the opening of its first large-format physical location.

“Our store is thoughtfully designed to be both inspirational and practical, empowering shoppers to create spaces that are just right for them,” Liza Lefkowski, the furniture retailer’s vice president of merchandising and stores, said in a statement.