Is anyone buying couches and beds from Wayfair anymore?
New York CNN Business —Early in the pandemic, people realized they were going to be spending a lot more time at home.
Shoppers dished out for new sofas, beds and decor, remodeled their kitchens and backyards and invested in their remote work setup.
Demand was so hot that it broke global supply chains and caused lengthy delays for goods.
It all meant boom times for online retailer Wayfair (W) and companies such as Williams-Sonoma (WSM), RH (RH), Bed Bath & Beyond (BBBY), Overstock (OSTBP)and other furniture and homegoods’ chains.
Wayfair (W)’s stock leaped 140% in 2020.
Inflation has tapped out lower and middle-income shoppers, who have pulled back their discretionary purchases to focus on paying for necessities like groceries, gas and rent.
Wealthier customers have shifted their spending from furniture and other goods to travel and services.
Wayfair posted a net loss of $378 million during the quarter.
“We have also seen many of those discretionary dollars flow away from goods to services, especially travel,” he added.
Shah said customers have been trading down to cheaper options and Wayfair has been increasing promotions to spur demand.
Wayfair’s stock has plunged more than 60% this year, while RH shares have lost 45% and Bed Bath & Beyond is down 57%.
Williams-Sonoma, which also includes West Elm and Pottery Barn, has dropped 13%.