Laminate: Vying for a bigger slice of the builder market

January 18, 2016

Jan 4/11; Volume 30/Number 14

By K.J. Quinn

Screen Shot 2016-01-18 at 3.34.40 PM Despite steady sales growth in the residential remodeling market, laminate has reportedly been slow to catch on in the builder business. While no longer a commodity, the original product claims that laminate was virtually indestructible and could be installed anywhere in the home have been tempered by concerns over how well the floor will hold up in high-moisture, heavy-traffic areas.

“Homeowners have had many laminate failures in the past from the first batch that came into the market in the 1990s,” said Robert Barufkin, sales manager, Tom Adams Windows & Carpets, in Churchville, Pa. “The failures [were] from joint swelling, chipping, fake wood appearance, transition molding failures—the list goes on and on.”

Meanwhile, the emergence of luxury vinyl tile (LVT) and longstanding popularity of hardwood and ceramic tile are taking away upgrade opportunities. “We’ve seen more LVT coming into the market for new home construction and multi-family homes,” said Phil Meyer, president, Carpet One Floor & Home, Concord, Calif. “We’re seeing shrinkage in the laminate market, and I think LVT is taking away a percentage of that business.”

Other observers concur, citing a preference for alternatives. “Most people are looking for wood or ceramic,” said Hoy Lanning, senior vice president, CMH marketing and Haines purchasing. While his company has sold some laminate to the builder market in coastal areas, he said by and large laminates are “not doing as well in the builder arena.”

In a way, the category became a victim of its own success. Since bursting onto the scene, the market was flooded with suppliers—both foreign and domestic—offering their own interpretations of the product. It wasn’t uncommon for flooring dealers to carry several laminate brands as styles, installation techniques and warranties varied by manufacturer.

Over the years, laminate evolved into a commodity product, with average uninstalled prices plummeting sharply. “Laminates are a non-factor in our builder markets in Texas,” said Larry Barr, president and CEO, Floors Inc., Southlake, Texas. “We only have a couple of our builders who actually show them.”

The news is not all negative; laminate flooring is reportedly increasing its presence inside some builder design centers as well as showrooms of dealers servicing new home buyers. “It is still a small to medium upgrade from vinyl or carpet,” Barufkin said. “In most cases, it is not a whole house, because transition molding for expansion and contraction have become a speed bump to the elderly and a tripping hazard to babies.”

In addition, laminates are perceived as offering more bang for the buck, thanks to improved styling and lower price points. “We’ve sScreen Shot 2016-01-18 at 3.34.30 PMeen an uptick in laminate sales,” said Keith Buckley of Vintage Design, Irvine, Calif. “The styling is significantly better than it was about four years ago.”

Other factors helping to build a case for laminates in the builder market include fluctuations in wood flooring prices, ease of installation and a renewed emphasis among suppliers to produce better-quality goods.


Mitigating factors

There are, however, factors at play which stand to impact further penetration of the category in new home construction. For starters, laminate flooring is no longer the only synthetic product that closely resembles the look and feel of natural materials.

Meanwhile, hardwood continues to serve as a popular option. “We still do a lot of parquet and solid hardwood in the New Jersey and New York markets,” said Michael Schreiber, president, Mike’s Flooring, Chantilly, Va. “We haven’t really seen that change over to laminate. In other markets, the switch has been to LVT and ceramic.”

Indeed, consumer buying habits vary widely by region, which in certain builder markets has created opportunities for laminate. “While LVT also has moved into this space, laminate retains relevance because to many consumers, renters or home buyers it offers more of a ‘hardwood-like’ experience in terms of texture, sound and so forth,” said Scott Rozmus, president, FlorStar Sales, Romeoville, Ill.

In the California territory served by Galleher, a number of builder design centers do not offer LVT—which opens the door for laminate. “Home buyers are very open to suggestions, and I don’t think the comfort level of LVT is there with some of the people selling to them,” said Jeff Hamar, president. “There are also some styling differences you can get with laminate that you can’t get with LVT, like random widths, beveled or chiseled edges, registered embossed patterns and stone or tile patterns.”

Performance attributes may also be determining factors in the purchasing decision. “The scratch resistance is better with laminates than any other product, except ceramic,” Lanning said.

While most laminate designs mimic hardwood, marble, ceramic and stone, it might not appeal to consumers who want the real thing. “We are not marketing laminate to our builder market due to the price point of homes we work on and the general demand of hardwood,” said Dana Chirico, vice president of wholesale and marketing director, Great Western Flooring, Naperville, Ill.

New housing prices have a significant impact on whether laminate even enters the conversation as a potential upgrade. “I have to believe laminate is getting used in the $180,000 to $250,000 housing market and, quite honestly, there isn’t a lot of new construction in that price range in New Jersey and Pennsylvania,” noted Sean O’Rourke, vice president of sales for hard surfaces, Avalon Flooring, Cherry Hill, N.J.

Local demographics affect flooring choices in the builder business as well. For instance, much of the new construction work Tom Adams services is in communities inhabited by people age 55 or older. “We are finding that more of our residential builders are willing to present laminate flooring as an upgrade option to hardwood, whereas five years ago laminate flooring was never discussed as an option at all,” Barufkin said. “Canes, walkers, wheelchairs and pets dominate the need for a product that gives the warmth of hardwood, but with better durability.”

While laminate sales may be soft in certain builder markets, industry members said this contradicts the category’s performance in residential remodeling. “We see the value of these products; the builders do not,” Barr said. “Ironically, we sell miles of laminates in our retail stores in the Dallas-Fort Worth area.”

What builders reportedly dislike about the product is the hollow sound created when walking over the floor. “Even with the best sound-deadening pads,” Barr said, “because of the loose-lay [installation] of laminate, there is a substantial noise you get when walking on this product.”

Despite both the real and perceived shortcomings of laminate flooring in the builder arena, marketers continue to promote the category to this important sector. These efforts are starting to pay dividends as distributors report more laminate lines are finding their way into model homes and builder design centers. As builders and new home buyers become more knowledgeable about the product and how it stacks up against base grade, sales to this sector are only expected to increase.

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