Manufacturers cut furniture prices by 7% in the first quarter

Furniture manufacturers in Russia reduced selling prices by 7% in the first quarter in annual terms against the backdrop of a contraction in the market. About it writes newspaper “Kommersant” with reference to the data of the Association of enterprises of the furniture and woodworking industry of Russia (AMDPR).

We are talking about commercial and office, kitchen and metal furniture. Adjustment of selling prices is possible due to a significant reduction in the cost of a number of components. Thus, prices for plywood in March decreased by 49% compared to March 2022, while chipboard, fiberboard and MDF board prices fell by up to 39%.

At the same time, the association notes a 10% decrease in furniture production in Russia in January-February against the backdrop of a decrease in consumer demand. According to Mikhail Burmistrov, General Director of Infoline-Analytics, in the first quarter, sales decreased by 35% in monetary terms. At the same time, the situation is already stabilizing in the first quarter, in April sales decreased by 10% yoy, and in May – already by 3%.

Experts interviewed by the publication explain such dynamics by rush demand in the first months of 2022. Manufacturers then raised prices also due to failures in the supply of materials, increased logistics costs and a sharp weakening of the ruble. At the same time, retailers are in no hurry to reduce retail prices for furniture, the newspaper notes. According to Alexey Vanchugov, Managing Partner of Vanchugov & Partners, networks used to have the option of deferred payment and factoring, but now, as a rule, an advance payment is required for the delivery of goods.

In the first quarter of 2022, the turnover of the Russian furniture market amounted to a record for several years 79.6 billion rubles, an increase of 20% in annual terms, but already in May of the same year, Russian furniture manufacturers reported about the maximum decline since 2000 in sales of their products.