Americans must love sleeping.
Why else are there so many mattress stores? Along with Starbucks, drug stores and cellphone carriers, mattress retailers gobble up prime real estate.
The brick-and-mortar stores operate in clusters, often a stone’s throw from one another on corners or heavily-traveled roads. Within a 25-mile radius of Harrisburg, there are 13 Mattress Warehouse stores.
On the East Shore, three shops - Mattress Firm, Mattress Warehouse and Bob’s Discount Furniture and Mattress Store – congregate on a stretch of Jonestown Road in Lower Paxton Township.
Along the Carlisle Pike on the West Shore, a collection of four stores, including Mattress Firm, Mattress Warehouse, Sofa Selections and La-Z-Boy Home Furnishings & Décor, provide shoppers with plenty of options. Meanwhile, a Sleep Number is set to join them at a new strip center under construction in front of Kohl’s on the Carlisle Pike.
Shoppers also can test beds at warehouse clubs, furniture stores and shops inside malls, or shop online for brands like Purple, Nectar and Casper.
Considering mattresses are a once-in-a-decade purchase, the proliferation of retailers is puzzling. It boils down to a simple business model. Mattress stores are no-frills with low overheads, big markups and few employees.
Industry experts also say the economy hasn’t hurt sales either, as consumers have more discretionary income.
Nearly 15,000 mattress stores blanket the nation, according to IBIS World. And the U.S. spends the most on mattresses of any nation in the world, a market expected to generate revenue of over $14.5 million this year and grow annually by 0.9 percent, according to Statista.
Location, location
It’s no coincidence mattress stores open where they do. The locations are designed to attract shoppers.
The chains compete much like Starbucks and McDonald’s for the same type of real estate, said Michael Magnuson, founder of GoodBed.com, a mattress review site.
A Mattress Firm store at Silver Spring Square. March 9, 2020. Dan Gleiter | dgleiter@pennlive.com
Because the industry is so competitive, the high-profile locations are desirable, if anything for advertising, Magnuson said. The stores act as billboards and increase brand awareness among shoppers.
One of the biggest chains is Mattress Firm with more than 2,500 locations nationwide, including its acquisitions of Sleepy’s and Sleep Train brands. In comparison, Mattress Warehouse operates about 250 stores.
“They want their signage. They want to be as visible as possible because a lot of times these things are impulse buys,” said Bill Gladstone of the Bill Gladstone Group at Lemoyne-based real estate company NAICI.
Shoppers en route to another destination might stop because their current mattress is uncomfortable and they want to peruse the options, he said. Often shoppers recognize the stores from television advertisements, he added.
Gladstone noted the stores won’t operate in the same shopping center due to exclusivity rights, but they stake out spots close to one another on purpose.
“It’s kind of like anything in retail. Why does Wendy’s want to be next to Burger King and McDonald’s? It’s just easier. If you want to shop for a mattress, you just walk from one store to the next,” Gladstone said.
High-margins and low overhead
Economics also comes into play. The mattress industry operates on higher margins than other retailers, as much as 40-50 percent, according to Consumer Reports.
So a $1,000 mattress might come with a $400 to $500 markup. By the time you factor in expenses such as rent, Magnuson said the gross margins are similar to other retail sectors such as clothing.
The bottom line is retailers don’t need to sell that many mattresses to make a profit.
While McDonald’s has to sell a half-million burgers to cover its rent, mattress stores can sell about 1,000 mattresses or the equivalent of two or three mattresses per day, Magnuson said. The average purchase price is between $1,000 and $2,000, he said.
“You look at a mattress store and it always looks empty. They have far fewer number of sales to get,” he said.
With less overall items to sell, mattress stores don’t need a full floor of sales people. Typically, one employee sits at a desk waiting for customers.
Joe Garber of Mattress by Appointment in Middletown. March 07, 2020. Sean Simmers | ssimmers@pennlive.com
At Mattress by Appointment in Middletown, owner Joe Garber is the only employee.
That’s because the store operates by appointment-only. The company is headquarters in Greenville, South Carolina, and the independently owned shops are located around the country.
Customers call and set up appointments to meet with Garber, who reviews inventory, prices and delivery options. He sells three brands - PrimaSleep, Wellsville and the Mattress by Appointment line – with options to buy adjustable bases, foundations and metal frames, as well as accessories like pillows and sheets.
“They can come in here. They can try them out. They are not rushed. They are not pressured. They are setting an appointment as opposed to just stopping in and getting what they get,” he said.
He said overhead is low because he’s not paying employee salaries and benefits, renting a big space and paying for advertising. Garber’s shop doesn’t fit the specs of a traditional mattress showroom.
It is sparse in comparison and located in a shopping center. He said the by-appointment model also helps alleviate much of the confusion associated with mattress purchases.
“I think it has been difficult because there’s so much advertising that people get overwhelmed. As I like to tell people when they come in it’s actually quite simple here. It doesn’t really need to be that complicated,” he said.
“It’s a grudge purchase”
While shoppers know they need to buy a mattress, David Higgins, marketing analyst for US-Mattress in Michigan, said it’s not a process they enjoy. The company sells about 30 mattress brands online and operates eight stores in Michigan.
“I’ll be honest, they hate it. They absolutely hate it. I’ve never heard anyone say they like it,” he said.
For that reason, many people delay purchasing mattresses. Higgins and others in the industry noticed sales climb following the 2008-11 recession due to pent-up demand.
“You’ll actually see sales go through the roof and in the downturn it’s pretty much number by number across the board. We’re almost like a commodity, but we’re not,” Higgins said.
Part of the problem is unlike buying a car, GoodBed’s Magnuson said a mattress doesn’t offer any social currency or endorphin rush. Plus, it can be confusing. Do you want memory foam, an adjustable bed or innersprings?
“I call it a grudge purchase," he added.
It’s partly why he founded GoodBed after what he described as a frustrating experience buying a mattress with his wife after they got married. The site is designed similar to Edwards for cars and Kayak for travel.
It offers ratings and reviews, coupons and a “Find the Right Bed” quiz that asks shoppers their budgets, comfort preferences, sleep positions and whether or not they prefer a cool mattresses or memory feeling. The quiz narrows down suggestions for users including brands, possible stores and price points.
The quiz works because mattresses are not a one-size-fits-all product. Magnuson said he noticed shoppers are trained to look for the best item, whether it be a toaster or washing machine.
“Mattress are more like pants. Your pants aren’t going to look great on me and vice versa. With pants we intuitively know that,” he added.
Changing shopper patterns
It used to be mattress purchases were made in department stores.
Lancaster Mattress Co. owner Andy Miller said he has witnessed many changes since his family opened the first store 37 years ago. At the time, dedicating a store just to bedding was a novel idea.
Lancaster Mattress operates three locations in Lancaster County and sells brands such as Sealy and Stearns & Foster. The stores offer delivery (as far as Harrisburg and York) and remove customers’ old mattresses for no fee.
Needless to say, Miller said the industry has faced a 30-year disruption with the arrival of increased competition and e-commerce. One of the biggest changes he said has been the invention of the rolled up “bed-in-a-box” designed for shipping.
The trend started around 2014 with Casper’s launch of the mattress-in-a-box. Today, a few hundred online sites are dedicated to mattress sales.
In fact, online sales captured 21 percent of the bedding market in 2018, or about $3.4 billion worth of business in the retail bedding marketplace, according to Furniture Today. But shoppers still want to try out mattresses, thus online company, Purple now sells in some Mattress Firm stores and Casper through Target.
“For many who buy online, it’s mainly about convenience. They can sit at their desk or phone and make a purchase and believe what they order in the mail will be a feel, price and quality to their liking,” Miller said.
Online competition has pushed Lancaster Mattress to up its digital game with a relevant website and Google search engine, Miller said. Yet, despite the online sales boom, he said shoppers still want to test mattresses with price, quality and feel remaining relevant.
He notes while the stores are not located in high-profile spots like the chains, set themselves apart with fair prices and a less aggressive sales style, and quality mattresses.
“There is still a place for us, we firmly believe,” Miller said.
US-Mattress’ Higgins agrees a certain section of the population wants to shop for mattresses in person. Mainly the younger demographic, those ages 21 to 35, tend to order online, while older shoppers gravitate toward showrooms.
“Not everyone wants to see it on the web. They need to touch it. ‘I have to feel it for myself,’” he said.
Can they all survive?
It hasn’t all been sweet dreams for the mattress industry.
In 2018, Mattress Firm emerged from Chapter 11 bankruptcy and closed about 700 stores, including a handful in central Pennsylvania. At the time, CEO Steve Stagner said in a statement those stores are located "in certain markets where we have too many locations in close proximity to each other.”
Now that shoppers no longer need to walk into a physical store to buy a mattress, they can begin and end their journey online, Magnuson said. He thinks in the future fewer shoppers will head to stores, and the ones who do will first do research online.
Eventually, he believes the number of physical stores will decline.
As Garber sees it, the best shops will win.
"If there is a glut, the ones that aren’t doing well will go away. As long as the businesses are there, there is a demand for the product,” he said.
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