Size Plateau

The American marketing mantra has long been “Bigger is better.” Over the past three decades, we've seen expansion in everything from the meals we eat to the cars we drive to the houses we live in. Super-sized dinner portions, massive SUVs, and hulking McMansions that overshadow property lines are symbols of the good life. But are there no limits?

Well, it appears that there are, and that we may have even reached a “size plateau.” Meal portions (and content) are now the focus of nutritionists nationwide, rising gas prices are stifling sales of SUVs, and the average size of the American home has remained steady at 2,300 square feet since 2001 — up from 1,500 in 1970.

According to a recent report in The New York Times, the reasons for the plateau in house sizes include the cost of maintaining the home, the expense of furnishing it, and the fact that most Americans just don't feel the need for more space. In lieu of paying for that extra bedroom, homeowners now want upscale amenities, be they granite countertops, higher ceilings, crown moldings, or radiant heating systems.

What does it all mean for the gift and home decor retailer? Obviously, the need for more accessories to furnish ever larger homes is going to slow. On the other hand, the accessories that are sold are more likely to be high-end items. Garden and terrace areas will also become more important living spaces (there's no need to heat or cool them), as our story “Garden Variety,” page 62, notes in a report on the latest trends in outdoor living.

But perhaps the most important change will be a shift in the mix of gift and home decor merchandise. As Americans begin to spend less to decorate their homes, they'll look to spend money on gifts for themselves and others — boosting sales in categories from fashion jewelry to personal care to, perhaps, even collectibles. Specialty retailers should watch this change closely, tracking what products their customers are asking for, and adjusting their merchandise mix accordingly.