July 9/16, 2018: Volume 34, Issue 2
By Ken Ryan
Despite a lackluster first quarter for some retailers—and an unexpectedly soft April for others—the consensus among flooring dealers is the first half of 2018 fared better than expected.
Not surprisingly, the resurgence is tied to red-hot product categories. While the LVT category and its super sub-segments continue to drive growth, dealers say there has been strong activity from two unlikely heroes—carpet and laminate.
“Both categories are strong for us this year and, I believe, well into the future,” said Dave Snedeker, division merchandise manager-flooring, Nebraska Furniture Mart. “Both categories are viable in our markets and offer great values for our customers.”
Sales of residential carpet have been trending up in the first half of 2018, a sign of a better economy and willingness among consumers to invest in better goods, observers say. Billy Mahone III, manager of Atlas Floors Carpet One in San Antonio, said he has noticed carpet already making a comeback in his market after years of flat to tepid growth. “We may not be selling as much square footage-wise, but things have been evening out with customers typically selecting higher quality products for the rooms where they place carpet in their home,” he explained.
Several dealers told FCNewsthey were especially pleased with the pace of activity, which started out slowly but picked up quickly in the second quarter in most areas—albeit with an unexpected April dip for some. “The first half has been very busy with no slowdown in either commercial or residential flooring,” said Carlton Billingsley, owner of Floors & More, Benton, Ark. “The two biggest surprises for me was the WPC category, which continues to grow with our sales at record-breaking pace. Also, the end user is spending more per unit for better material selections for finishes than I have seen in a while.”
Larger flooring dealers that generally outperform the market did not disappoint in the first half, either. Cherry Hill, N.J.-based Avalon Flooring, with 14 locations in three Mid-Atlantic states, saw activity ratchet up in the second quarter with positive signs in carpet sales and especially the LVT segment.
At The Flooring Gallery, with five stores in the Louisville, Ky., market, the first half was busier than the previous year on both the retail and new construction fronts. Still, Nick Freadreacea, president, said business success is not without its challenges. “The most unexpected, unavoidable thing is the absolute shortage of installation and the extreme labor increases we have had to absorb,” he explained. “Top line is great, but the bottom line has been short due to the cost increases from the mills and labor.”
In light of the U.S. Tax Cuts and Jobs Acts bill, which passed near the end of 2017, some flooring dealers were expecting to see a more robust start to 2018. Instead, many saw an uneven first half, with improving conditions from April through June. “My assessment of the first half would be an unusually slow first quarter and a superb second quarter,” said Bill Zeigler, co-owner, Charles F. Zeigler & Sons, Hanover, Pa. “This still baffles me.”
Indeed, fickle consumers and uneven buying patterns have become the new norm in flooring among specialty flooring dealers. John Taylor, owner of Taylor Carpet One, Fort Myers, Fla., noted that while the first two quarters were good, the company did not experience the increases it hoped to achieve.
“We are still up for the year and still getting good traffic on a day-to-day basis,” Taylor said. “People seem to be a little hesitant on pulling the trigger right now. However, the LVP category is still showing a lot of growth and continues to take away from the wood category, in our opinion.”
Then there are others like Allentown, Pa.-based Crest Flooring, which had a banner first half from the get-go. In fact, sales in the first half far exceeded 2017 on a percentage basis, according to Steve Weisberg, president. “That was a pleasant surprise,” he said. “While LVT is leading the parade, we are still selling a lot of carpet.”
No matter how favorable the road ahead appears, Weisberg’s strategy is to not become complacent. “We continue to be very aggressive with our advertising, and our market share continues to grow because of it,” he said. “As Tom Petty said [in his song, “Mary Jane’s Last Dance”], ‘You never slow down, you never grow old.’”