synopsis provided by Don Gorenberg 

 

The recently distributed June 2010 issue of Home Accents Today includes an analysis of the responses to the magazine's 2010 Retail Operations Survey.  Unfortunately, the issue and article are not available (as of July 1) on the magazine's website.    It is arguable as to whether the results of this survey are applicable to "American craft retailers".   Many of the product categories (such as "decorative accessories", "mirrors", "lamps", "frames", "clocks" etc.) reported carried are found in craft retail stores.  The glaring difference for comparison purposes might be the absence of "jewelry" as a carried/sold category.  However, in the absence of any more recent specific surveys, it is submitted that it is worth consideration for comparison purposes. 

 

Here is a synopsis of some of the information for your consideration:

 

1. According to the magazine "home accent retailers" whose responses were considered in reaching the results of the survey include "home accent retailers and gift specialists, interior designers and full line furniture stores."
2. Responding retailers operate more than 100 stores.  One might argue that the sample is to small to be considered determinative , but the survey director believes it to be statistically valid.
3. 84% of the responding retailers operate only 1 store and another 10% operate 2.
4. 58% of the retailers reported annual sales of under  $500,000 while another 22% had sales between 500K and $1,000,000.
5. Seemingly important medians (50%  of respondents above and 50% below) include      
     a.  Average square footage of selling
                     space 3000sq ft
     b.  Gross margin % (net sales-cost of goods/net
                     sales) 46%
     c.  Potential customer visits per week 178
     d.  Close ratio (number of sales/customer  
                     visits) 40%
     e.  Sales per square foot of selling space $125/sf
                    
6. Rent (as a % of expenses )                        6%
7. Advertising costs (as a % of expenses)        4%
8. Payroll (as a % of expenses)                     21%
   

There have been other surveys in the past that could be deemed relevant for comparison purposes including Home Accents 2006 Survey (which says it included "gift stores" with "home accent stores" and considered "furniture stores" separately in many computations), the Rosen Group 2005 Craft Retailer Survey as well as the Rosen Group survey of 1998 (both of which were conducted by Dr. Barton Weitz a professor of retailing at the University of Florida).  

 
Below is an attempt to provide a comparison of the findings of those surveys.  There was a significant variation in terminology and methodology among the surveys and best efforts were applied to attempt to compare "apples to apples".   It should be noted that "averages" reported are often considered less reliable than "medians" as responses at the high ends of the spectrum often skew the results.  It also should be noted that the surveys sometimes differed in reporting results as percentages of "expenses" versus "total revenues"  (sales)-an effort has been made to note those instances. 

 

Hopefully members will find this review of interest.  Please direct any comments or questions to the CRAFT Discussion Forums.