Alan Desk Business Interior was about to open its second location when the coronavirus pandemic hit last March. But unlike other businesses that saw their revenues collapse, Alan Desk was able to make a turn-around with its new space. 

The four-generation family-owned business, based in Los Angeles, CA, sells American-made furniture as well as interior design across the country and Canada. The second showroom was supposed to be an addition to the main one, with home and business furniture, as the business was expanded prior to the pandemic. 

To accommodate for the pandemic shutting down businesses and moving office workers to work from home, the owners decided to focus on low-cost and affordable furniture that could also be used in a home-office for the second showroom.

“It’s been doing well because a lot of people are now working remotely and they’re finding out that dining chairs or dining tables or just chairs from Amazon are painful because they get a lot of back pain or neck pain,” said Vladimir Alvarez, vice-president and co-owner of Alan Desk. 

Now, Alvarez says the company expects to see increased sales in the coming months. What was originally intended as a temporary response to the pandemic is now becoming a permanent part of their business model. They have begun stocking more ergonomic chairs and standing desks.

Spending on Furniture Will Keep Growing

Will people keep working from home and but more home-office furniture

As the pandemic shuttered businesses and closed offices, consumers initially resorted to using dining room chairs and kitchen tables for work. As remote work became the norm, consumer spending on furniture and home furnishings increased as they needed to set up home offices for comfort. Experts say the trend is likely to continue as workers choose to work completely remote or a hybrid form of work. 

“I think the argument for a more flexible work environment is pretty well ingrained at this point,” said Michael Gapen, chief economist at Barclays Capital Inc. “And, I do think it would lead to a post pandemic demand for electronics and home office furniture, that would be more robust than it was before the pandemic.”

Furniture sales have trend upwards for the past quarter with a recent 5.9% change in March compared to February, according to the retail sales report. This number was largely attributed to the stimulus payments. For April, the number slightly declined compared to March with a -0.7% decrease. 

Overstock, an online home improvement retailer, said it has seen a significant uptick in living room furniture and office furniture as well as high demand for patio furniture since last March.  

The company says its office furniture sales have grown nearly 200% with its top selling items being office and gaming chairs.

Experts say increased incomes are helping this trend. Government stimulus payments and increased hiring in recent months have helped improve household’s balance sheets and boosted savings in the past six months. Personal income, reflected by increased government benefits and stimulus payments, was $6.04 trillion in March, according to the Bureau of Economic Analysis. This means consumers now have the income to afford furnishing and interior decorations to make their homes a more comfortable and suitable work environment. 

Alvarez, co-owner of Alan Desk, said while the company had increased sales in the affordable office furniture, they also had some clients purchase the expensive ones. 

“Some people spent a good amount of money on high-end office furniture and it’s interesting that they did that, but I guess, the people who had the money, they used it,” said Alvarez. 

While the majority of office workers in the country shifted to remote work last March  to curb the spread of the pandemic, the comfort of working from home has made about 54% of workers hesitant to return in-person to the office full time, according to a survey by the Pew Research Center. 

In a working paper, economists Jose Maria Barrero, Nicholas Bloom and Steven J. Davis surveyed 22,500 American workers from May through October last year. They found that 22% of all full work days will be done from home after the pandemic ends, compared to 5% before the pandemic. This works out as roughly 2 days a week for the employees that can work from home. This estimate is based on the workers’ estimates of their employers’ plan for remote work. The workers themselves said they would like to stay home 44% of the time.

Experts like Stan Shipley, a corporate economist at Evercore, say that corporations are going to want workers in person “because, the perception is that they don’t work harder at home.” On the flip side, some companies are finding it cheaper to downsize on office space and also eliminate spending on office products. 

The boom in the housing market is also helping home-office furniture sales. Demand for single-family homes in the U.S. is so higher than supply, that the shortage has risen by 52% compared to 2018, according to a 2021 analysis by mortgage-finance company, Freddie Mac. The company also conducted the analysis in 2018. 

The chart provides an indication of the size of the for-sale inventory in relation to the number of houses currently being sold. The months’ supply indicates how long the current for-sale inventory would last given the current sales rate if no additional new houses were built.

And, with increased incomes, some consumers are now looking to expand their living spaces to accommodate for home offices, which they would then need to furnish. As a result, there is a shift in preferences as they pursue homes in less urban areas for more space. 

“In terms of demand for bigger homes, we’re seeing now that people are having a dedicated room for work and things like that,” said Scott Brown, chief economist at Raymond, James and Associates Inc. “You may get a little bit more going forward as people are trying to relocate.”

At Edmond Furniture Gallery in Oklahoma City, OK, the owners also recently saw an increase in home-office furniture sales, earlier in the pandemic, and on items like desks and chairs. 

“There has been a huge increase in the demand for it around here, I’d say probably not as much as in New York,” said Chris Sadeghy, a manager at the store. “Our business has been a lot better, but I feel like it’s been overall better [across all kinds of furniture] because of the housing boom that we’re seeing here.”

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