The challenge: The resulting “housing paralysis” is having a ripple effect on home goods retailers. When people move they typically buy items such as home decor, furniture, and appliances. But with more consumers staying in place, compounded with the lingering impact of inflation, fewer people are buying items for their homes.
A reversal in fortune: In the early days of the pandemic, consumers who were stuck at home decided to update their spaces, which helped boost sales at retailers such as Wayfair, Williams-Sonoma, and RH. But with many of those remodeling jobs complete, and fewer consumers embarking on new projects, those merchants are seeing their sales suffer.
The big takeaway: The US Federal Reserve has one blunt tool to combat inflation: interest rate hikes. And, after the Fed raised interest rates another three-quarters of a percent last week for the third time in a row, it signaled that it is determined to continue raising rates until inflation breaks.
This article originally appeared in Insider Intelligence's Retail & Ecommerce Briefings—a daily recap of top stories reshaping the retail industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.