Within the outdoor furniture space, prices have been consistently heading upward, while consumer reaction to those increases has been anything but consistent.
A spot check of outdoor retailers revealed a variety of answers when they were asked whether inflation has affected business, whether they have increased prices and whether customers are more hesitant about price now than they were a year ago.
In some places, customers are pushing back on prices. In others, they aren’t — at least not yet, drawing a distinction between price increases on needs such as groceries and gasoline and wants, such as a new patio set.
Chad Scheinerman, owner of Today’s Patio in Phoenix, says that inflation has affected the way that he does business.
“We are seeing pushback on price points,” Scheinerman says. “Customers who want to spend $1,500 to $2,000 on a set are getting pushed out of the market unless they want to step it up to $2,500-plus.”
He said he has also seen an increase in people asking for discounts or when the next sale would be.
“From an operational perspective, like every industry, our labor costs have gone up significantly as well,” he says. “We have to account for these increases in the cost of the furniture.”
Scheinerman added that the increased costs have led him to increase prices.
“We have done more price increases in the past 24 months than I have in the past seven years, it seems,” he says. “We always try to hold prices for as long as we can. With freight costs, factory surcharges and factory increases, we have had no choice but to increase as we see fit.
“We do it strategically by item typically. There are always sweet spots in retail price points, so we do our best to try and maintain those where we can for specific items in hopes of making it up on the other pieces within the collection.”
Scheinerman says he has seen much more price hesitation today than he has seen in the past.
“There certainly are those customers where price doesn’t matter, but overall, there is more hesitation than there was a year ago,” he explains “One thing we have to remember is what we sell is a want, not a need.”
Justin Aulakh, president of Classic Patio in California, says that inflation is certainly having an effect on his business, but he is unsure of the extent.
“It’s not easy to measure exactly when a customer’s cutoff price for a certain item is,” he says. “This last round of price increases from manufacturers is one of the highest we’ve ever seen. Most likely, we have yet to see the worst of inflation but hopefully not.”
In terms of price increases, Aulakh says he makes that call as soon as he can.
“Hopefully, that is as soon as we receive the price increases from the manufacturer,” he explains. “However, sometimes there is a delay in updating our website, for example, and consumers will purchase the furniture online. At the end of the day, we still honor the price they purchased it at, but it can add up to a significant chunk of the profit margin lost.”
Many customers are concerned these days about inflation, but Aulakh says that he hasn’t seen any hesitancy about price, at least not yet.
“These days, inflation is on the top of everyone’s minds, it feels like,” he says. “Therefore, clients seemed pretty much the same this year, but I suspect that next year, we may see consumers get more price sensitive. The beauty of our business is that the value can be very subjective. Showing clients the true value of an item and connecting it to their life in a way that provides value will always win the day.”
Kristine Schultz, store president and chief executive officer of Patios Plus in Rancho Mirage, California, says she is seeing some hesitancy in the marketplace that she interprets as not being about concerns over inflation.
“I feel our customers holding back on big-ticket items until either the stock market starts to rally back or there are more favorable election results,” Schultz says. “I don’t really feel inflation on consumer goods has affected what our customer is spending.”
She explains that Patios Plus has had to increase prices several times, which she attributes to manufacturers handing down surcharge after surcharge, some of which are now retroactive.
“As a retailer, we are having to absorb those costs for special-order customers,” she says. “Our margins are down because of it. This is definitely hurting the retailers. We can increase the pricing on our stock inventory but not enough to make up for the ones on our special orders. The manufacturers need to stop bleeding their lifeline to the public.”
She added that people do not seem more hesitant about price than they were a year ago.
“They are aware that everything is going up and due to the present conditions of our economy, there is nothing any of us can do about it.”
