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Feb 13, 2023

Consumer Spending On Goods Eases

The U.S. home improvement industry in grew by about seven per cent in 2022, despite increasingly negative headwinds throughout the year, says Matt Leiser, a partner and home improvement council director at Cleveland Research Company. He told the ‘Cleveland Research Update: 2023 Playbook for Home Improvement Retail’ at the Orgill Spring Dealer Show that the year ended with sales 100 per cent above the ‘great recession’ and 50 per cent above the ‘housing bubble.’ However, consumer spending on goods is now easing after two years indicating lifestyles are normalizing as persistently high inflation has led to moderating trends in unit volume across the economy. As well, the threat of a recession was leading to pockets of risk/questions entering 2023. While retail sales were strong overall in 2022, momentum eased month-to-month to close out the year as most hardware store operators started seeing inflation impacting shoppers. While project intentions remain positive, the upside opportunity is more narrowly focused on younger generations. He said 2023 is likely to be more difficult than any of the last three years due to the competitive and difficult to forecast demand environment. This means home improvement retailers need to be agile and confident with their position in the industry and not run from “the softness” and instead look for the opportunities in an industry that is likely to see a solid resumption in growth within the next three years.

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