Does anyone buy sofas and beds from Wayfair anymore?

Shoppers have been searching for new sofas, beds, and decor, remodeling their kitchens and backyards and investing in a remote work setup. Demand was so intense that it broke global supply chains and caused long delays for goods.

It all means boom times for the online retailer Weaver (W) And companies like Williams Sonoma (WSM)And the R (R)And the bed bath behind (BBBY)And the jam (OSTBP) and other furniture and household goods series. Wayfair stock has jumped 140% in 2020.

Fast forward two years. The picture looks a lot different now.

Inflation has taken advantage of low- and middle-income shoppers, who have fallen back on their discretionary purchases to focus on paying for essentials like groceries, gas and rent. Wealthy customers shifted their spending from furniture and other goods to travel and services. Mortgage rates are rising, limiting the demand for new homes.

This puts pressure on Wayfair and other chains that saw a spike in sales earlier in the pandemic.

Wayfair said Thursday that its sales fell 15% during the last quarter ending June 30 compared to the same period last year. It also lost 24% of its active customers — a sign that the company is struggling to retain the shoppers it gained at the start of the pandemic. Wayfair reported a net loss of $378 million for the quarter.

“Customers are becoming more reflective about the direction their discretionary dollars are headed as prices at the gas station and grocery store eat up a larger share of their [their] portfolio,” Wayfair CEO Neeraj Shah said in a call with analysts on Thursday.

“We’ve also seen many of those discretionary dollars flow away from goods into services, especially travel,” he added.

Shah said that customers are trading on cheaper options and that Wayfair is increasing promotions to stimulate demand.

Wayfair stock is down 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, was down 13%.

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