Flooring sector well positioned for a rebound

HomeCOVID-19Flooring sector well positioned for a rebound
Insiders agree flooring is in a better position to rebound than other Main Street businesses.

An estimated 30 million small businesses serve customers throughout the U.S. They comprise restaurants, dry cleaners, dog groomers and independent flooring stores. But unlike some of these Main Street enterprises, flooring retail is better positioned for a successful rebound once the coronavirus dissipates.

That’s according to a host of retailers who told FCNews they envision improving conditions starting rather quickly. Why so confident? It starts with the premise that consumers who have maintained their income throughout this shutdown have extra cash now—ostensibly because they canceled trips, received tax returns or are simply not going out as often.

What’s more, several studies have shown that Americans will likely stay home more regularly in the immediate future and may invest in home improvement projects. There is another critical factor: Flooring does not profile like other brick-and-mortar retail businesses. There are far fewer customers coming into a typical flooring showroom than, say, a Best Buy (that’s a good thing in terms of social distancing purposes). In addition, the average ticket price in flooring is considerably higher than virtually any other retail environment. By this model, a flooring store has a much greater chance of success than, say, a Subway restaurant.

“I don’t see how these small businesses that rely on smaller tickets [per transaction] can make it,” said Ted Gregerson, CEO of Ted’s Abbey Carpet & Floor, Anniston, Ala. “However, we get a few customers and it might be a $15,000 ticket for hardwood throughout the home. So, I do think we are in a better position to rebound than other businesses. Besides, to invest in your home is never a bad thing. People are staying home, looking at their floors and seeing how ugly they are.”

The staff at Ted’s Abbey Carpet & Floor eagerly awaits the arrival of customers.

Gregerson said he has noticed in the early days of the reopening that customers who come into his store are serious. As he put it, “There are no tire kickers coming into a carpet store these days; they are buying. Our job is to close them.”

Retailers often bemoan the fact that flooring is a postponable purchase. During normal times, it might be considered a negative—not so much nowadays. “I believe the flooring business is in a great position to do well simply because our purchases are postponable,” said John Taylor, owner of Taylor’s Carpet One Floor & Home, Fort Myers, Fla. “That’s different from restaurants, for example, whereas if you miss a meal you will never get that meal back. Our consumer might not buy right now, but eventually they will.”

As more people have been cooped up at home during the stay-at-home orders, they have probably realized that it is time to get the projects around the home done, including the flooring. “Here in Florida, we could see a little delay as many of our Northern residents went home and might not return until the fall, thereby delaying their purchase,” Taylor explained. “With this, though, we are predicting a very busy fall—providing, of course, the COVID-19 virus stays under some sort of relative control.”

Other retailers agree flooring stands a better chance of rebounding faster if stay-at-home consumers ultimately decide to invest in home projects. That could represent a big win for his business. “People who are looking to replace flooring may want to replace it when this [virus] is over—so the lost business may very well just be delayed business,” said A.J. Boyajian, co-owner of AJ Rose Carpets & Flooring, with three Massachusetts locations. “In comparison, the unfortunate thing for a business such as restaurants is once they lose the business, they don’t get that night out back. Many of our sales may just be delayed, which could lead to a big surge.”

Retailers said customers will be chomping at the bit to do some home projects such as flooring after the stay-at-home orders are fully lifted.

Even if sales don’t spring back right away, there is the thought that the normally slower summer months will fare better because of pent-up demand. “They have been cooped up and have taken notice that their floors that needed replacing months or even years ago definitely need it now,” said Mike Montgomery, co-owner of Montgomery’s CarpetsPlus ColorTile, Venice, Fla. “They also will be hearing a lot about this pandemic, and will see that new waterproof, low-allergenic luxury vinyl plank floors would be a way of cleansing their home while giving it a much-needed facelift.”

Dealers like Bobby Merideth, owner of Flooring America OKC, in Oklahoma City, said those involved in the home improvement sector will benefit from the stay-at-home orders. “As homeowners have been secluded, they have begun building those ‘to-do’ lists, and flooring is a big part of the home improvement upgrade,” he said. “And since the new norm won’t revert back to the old norm anytime soon, the desire to begin those upgrades will only get stronger.”

Looking ahead

There is a consensus that the second half will grow stronger, especially in regions that were not too heavily affected by the pandemic. “I think there is a strong possibility that the industry will see good numbers in the third and fourth quarters,” said Palmer Johnson, vice president at Johnson Carpet One Floor & Home, Tulsa, Okla. “For areas that haven’t been hit as hard by COVID-19, their economies are beginning to reopen. It appears consumers may forego expenses like vacations, opting instead to invest in their homes.”

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FCNews May 11/18

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