Retailer roundup: First-quarter sales a mixed bag for dealers

May 30, 2017

May 22/29, 2017: Volume 31, Issue 25

By Ken Ryan

 

Screen Shot 2017-05-30 at 11.36.06 AMWith the 2016 Presidential election in the rear-view mirror, and with the U.S. economy experiencing a bump in consumer and investor confidence, flooring retailers are turning their attention to the business at hand—building traffic and growing sales. While most dealers FCNews spoke to reported a general uptick in business during the period, they experienced varying degrees of success.

“We were up 8.5% for this first quarter,” said Cathy Buchanan, Independent Carpet One Floor & Home, Westland, Mich. “We were very positive with a promising April, but May has slowed down over the past few weeks. And with Memorial Day upon us I am afraid May will see flat numbers.”

Like many dealers, Buchanan has seen a boost from hard goods. “Our hard surface sales have just been off the charts. Three days this week alone we have only hard surface installs going in—not a single carpet job.”

Dillabaugh’s Flooring America in Boise, Idaho, also put up strong numbers. “We were up a little over 10% through the first quarter, despite a slow start to new construction growth due to a winter unlike Boise has seen in a long time,” Casey Dillabaugh, owner, explained. “It delayed builders substantially and they quickly made up for that in March.”

Now, new construction on both the residential and commercial fronts is driving growth, Dillabaugh said. “Retail has been flat, if not a little soft. We had a fantastic private sale at the end of March, which helped boost those Q1 numbers.”

At Ted’s Abbey Carpet & Floor, with multiple locations in Alabama, the ratio was just the opposite from Dillabaugh’s. “While new home construction is still almost nonexistent in our market compared to where it was in 2007, retail traffic is better than it has ever been for us—and the commercial segment is strong as well here,” said Ted Gregerson, president and owner. “Our margins are up as well.”

Gregerson, who described business in the first quarter as “outstanding,” actually had some reservations coming into the year. “We had such a great 2016 that I was worried about trying to maintain the pace this year. But we got out of the gate really fast and were actually 15% up through the first quarter. We maintained that lead over last year through April and the first half of May as well.”

For Ted’s Abbey Carpet & Floor, maintaining a strong presence in the market is the key to success. “I believe the reason our retail traffic is so good is because we have never stopped advertising through the years. We have been consistent every month of every year in putting our message before the consumers in our market. Not only have we continued with traditional type advertising such as radio, direct mail marketing, etc., but we have hit all avenues of social media really hard. In March 2016 we hired someone full time to be our director of online marketing.”

The strategy seems to be paying off. To encourage retail traffic and awareness, Gregerson offers giveaways every month in order to build its followers on Facebook, Twitter, Pinterest, Instagram and LinkedIn. The company also increased the amount of money it spends on pay-per-clicks every month. “I truly believe it has had a major impact on our retail traffic, and it will only continue to get better as we go. Just [this month], I was in our Floors To Go store, and our store manager was telling me he has never seen it this busy as far as walk-in traffic is concerned.”

For other dealers, active remodeling work is driving business. “The renovation market and new home construction business is booming in Utah right now,” said Suzy Namba, co-owner of Salt Lake City-based Namba Services. “We’re seeing a lot of jobs from homeowners on the higher end of the market.”

Dealers elsewhere are seeing more moderate growth. “Our first quarter started a little slow but picked up and we ended up with about 5% growth over the first quarter of 2016,” said Josh Elder, Gainesville CarpetsPlus Color Tile in Gainesville, Fla. “The biggest increase in sales first quarter 2017 over 2016 was in resilient, particularly in the WPC and rigid core products.”

At Crest Flooring in Allentown, Pa., business during the first quarter was a bit soft. “We have been slightly off compared to last year’s period,” said Steve Weisberg, owner. The good news is the company is doing better on the residential front, especially in hard surface cash and carry. “We’re slowly showing signs of activity. We completed a great Shaw program with coupons and financing that was extremely well received. In fact, we are booked with installation for the next month.”

For other dealers, sales during the first quarter were flat. Kevin Rose, owner of Carpetland Color Tile in Rockford, Ill., reports business during the first three months of 2017 were level with last year’s sales. “Ecommerce is still gaining market share of the resilient and hard surface sales, and the excessive competition and lower margins in the marketplace lower the average ticket. I also believe politics played a role in the non-growth rate thus far in 2107.”

At Davenport, Iowa-based Carpetland USA, another Alliance Flooring retailer, sales grew incrementally. All in all, though, activity was sluggish.

“It has been a very muddied and competitive marketplace thus far in 2017,” said Eric Langan, president and owner. “While we’re up, it hasn’t been easy. We’ve had to be very aggressive with our marketing. The overall market competitors appear to be stressed, and it shows in what kind of pricing is being quoted within the marketplace.”

Short-term outlook
Retailers are hopeful that the momentum generated at the start of the year will carry over into the second and third quarters. At the same time, those who experienced lackluster sales don’t all of a sudden expect a dramatic turnaround. Most, though, are cautiously optimistic.

“I do believe things will level out,” Dillabaugh said. “We’ve already seen a decrease in retail traffic due to warmer weather and clients spending on the outside of their home rather than the inside. Construction will continue to be strong but retail, or lack thereof, will stifle full potential.”

Carpetland/Color Tile’s Rose expects to be up by 3-5% for the second quarter. “I am hopeful that politics will take a backseat with the media as time progresses, and our clients will be more at ease with their economic situation and spend more in our category.”

Elder expects to cruise along. “Our second quarter has started off strong. If this continues, I expect between 8-10% increase over the first two quarters compared to our 2016 sales.”

Others, like Carpet One’s Buchanan, are more skeptical. “Overall, business is wishy-washy. Right when you think everything is on an uptick the clock stops and traffic dies. Our advertising efforts never change; we are constantly out there on radio and TV and even billboards. So it’s not from a lack of advertising. It’s quite unexplainable. Due to this drop we will be flat to +2% from last year.”

 

(Lindsay Baillie and Reginald Tucker contributed to the story.)

 

 

 

 

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