Stymied Homeowners Drive Home Goods Sales At Wayfair, TJX, Ikea

Stymied Homeowners Drive Home Goods Sales At Wayfair, TJX, Ikea

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Sofas, closet organizers, stylish lighting, throw cushions, etc.—all things home goods—may be the next retail category to ride a consumer wave. Evidence is mounting that frustrated homeowners blocked from selling or buying by stubbornly high prices and mortgage rates appear to be shelving plans to move and, instead, investing in sprucing up the space they have.

That’s the clear takeaway from HomeGoods parent TJX’s strong fourth-quarter 2025 earnings and confirmed more recently by e-commerce giant Wayfair’s second quarter financial report, which startled Wall Street with a robust and unexpected 5% surge in second quarter revenue.

In a February call with analysts, TJX CEO Ernie Herrman spoke about the company’s aggressive plans for its home goods fleet, noting, “The home and some of our accessory businesses were stronger than apparel,” with comp store sales up 4% year-over-year. The home division boasted 1,000 stores at the time, with long-term plans to expand to 1,800. A June headline on industry news site homepagenews.com declared: “HomeGoods Is Powering TJX Through Uncertain Times.”

A similar storyline is unfolding at Wayfair, an e-commerce merchant of furniture and accessories whose revenue and profits boomed in 2020, peaked in 2021, but have since flattened. The company’s latest upbeat financial report on $12 billion in trailing 12-month revenue was a notable break-out from the sideways pattern of the past two-plus years. TJX, predominantly an apparel retailer, reported its HomeGoods division sales for fiscal 2025 were $9.4 billion.

The outlook for TJX, Wayfair, and Ikea—the largest player in the category worldwide and expanding rapidly in the U.S.—has been enhanced by the misfortunes of several competitors. Bed, Bath and Beyond went belly up in 2023, shuttering nearly 400 stores, and At Home is closing 30 stores in the U.S. after recently declaring bankruptcy.

Overstock, an e-commerce home goods merchant now known as Beyond Inc., reported a 22% rise in revenue for the second quarter, but its sales are down by 29% year-over-year, and revenue has been shrinking for the past four years.

TJX and Wayfair are direct competitors with one very big difference. TJX has been a bricks-and-mortar retailer where customers can see and touch merchandise and discover items they didn’t know they wanted or needed. (TJX tried operating an e-commerce channel but recently closed it down.)

Wayfair, on the other hand, has been exclusively an e-commerce merchant that only recently opened its first physical store, in Chicago. CEO Niraj Shah told analysts that the Chicago store has flourished and new stores are planned in Atlanta, New York and Denver.

Clearly both companies see a bright future in home goods, and small wonder. The real estate market is dismal. According to U.S. Census Bureau data, the number of existing home sales in the U.S. is about the same today as it was at the bottom of the Great Recession in 2010, and almost exactly the same as it was 30 years ago, when the population of the country was 20% smaller.

Meanwhile, mortgage rates are well above the so-called 6% “sweet spot” that experts say would begin to thaw the market. But that benchmark may not mean much when you consider how overpriced homes are when adjusted for inflation.

According to Federal Reserve data, the median price of a single-family home in 2009 was $221,000 which, adjusted for inflation, would be $333,000 today. Instead, the median price today is $411,000, a premium of 23% over inflation. A correction of that magnitude in prices would wipe out trillions in household net worth—a calamity.

It would be hard to construct a scenario where the home availability and affordability crisis resolves itself anytime soon, especially in the context of the economic uncertainty that has befogged ordinary economic forecasting.

We know that Americans are spending less on travel and entertainment than they were the past two years. That leaves open the tantalizing prospect that redecorating and nest-freshening will become a trend and possibly inspire a revival in the long-lost art of home entertaining.