Furniture sales fall victim to inflation

Furniture makers are passing tough times even ahead of Eid-ul-Azha, which is usually a high sales period, as people are uninterested in buying luxury items in the face of rampant inflation in recent months, according to market players.

The overall 30 to 35 per cent drop in sales this year comes as a double blow for the industry, which is still recovering from two years of pandemic-induced losses as people opted for cost-cutting amid the economic uncertainty caused by Covid-19.

Alamin Sheikh, owner of a wooden furniture shop called Sneha Doors and Furnitures in Dhaka's Mohammadpur, said he has registered almost no sales since Eid-ul-Fitr in May.

"This is because people are buying less non-essential products in the face of rising living costs," he added.

Sheikh, who makes and sells customised products, went on to say that maybe only 5 per cent of the stores like his are doing good business at this time.

Even branded companies have found themselves in the same boat as reduced demand is forcing them to curtail costs at a time when they are offering various discounts and deals to lure in buyers.

Selim H Rahman, chairman of the Bangladesh Furniture Industries Owners Association, said the post-pandemic effect and recent global economic crisis centring the Russia-Ukraine war have highly affected their businesses.

"We are facing problems in purchasing raw materials from both global and domestic sources as freight costs have spiked due to the war," he said.

Besides, the taka's repeated depreciation against US greenbacks has dealt another blow to the industry as it greatly affected import costs, he added.

Rahman, also managing director of Hatil, expressed concerns over the proposed budget for the upcoming fiscal year as certain measures would inflate the cost of importing related accessories.

In addition, the last Dhaka International Trade Fair did not offer any relief for furniture companies as the event was held at a new location for the first time amid the Covid-19 situation, which prevented adequate customer turnout.

"We did not get much response from the fair as the crowd was less," he said.

With this backdrop, Hatil, a leading furniture maker in the country, will most likely have to adjust its product prices after the upcoming Eid in order to offset the company's current situation.

Asked what their plan was in this regard, Rahman said they are trying to remain economical so that the prices are affordable for middle-class people.

Echoing the same, NHM Fazle Rabbi, head of marketing at Partex Star Group, said sales have dropped by at least 30 per cent to 35 per cent over the past year.

"Sales are not up to the mark," he said, adding that branded companies control around 35 per cent of the total domestic furniture market while small and unbranded manufacturers hold the rest.

Rabbi then said that to attain their sales targets, Partex is planning to offer several discounts.

"People usually think twice or thrice before buying furniture as they are not necessities," he added.

On the other hand, Regal Furniture, a concern of Pran-RFL Group that caters to middle-and-higher-income customers, seems to be doing good business despite the industry's recent struggles.

"Regal makes wooden, metal and laminated furniture products at affordable prices," said Kamruzzaman Kamal, director for marketing at Pran-RFL Group.

"As a result, we have registered 20 per cent growth over the years," he added.