Tariffs can’t derail LVT’s momentum

Home Categories Tariffs can’t derail LVT’s momentum

By Ken Ryan

More than 65% of LVP at Frazier’s Carpet One Floor & Home comes from outside China. Shown is Mohawk SolidTech Plus, made in the U.S.

The United States Trade Representative’s (USTR) decision to not include floor covering among items granted exemption from the Section 301 tariff was greeted with a collective shrug by flooring retailers.

And there’s a good reason why: Despite the reinstatement of 25% tariffs on all vinyl flooring made in China, dealers say the LVT category—led by rigid core/SPC—continues to dominate sales in 2020.

Exclusion from the tariff—which was enacted in November 2019 and applied from Sept. 24, 2018 to Aug. 7, 2020—exempted many rigid LVT products from the 25% tariff. As the Aug. 7 deadline loomed, some retailers brought supply at the lower cost; others say the cost differential—even at a 25% tariff—is not enough to dissuade consumers from buying WPC and SPC flooring.

“The tariffs have not slowed the consumer’s demand for LVT,” said Mike Foulk, owner of Foulk’s Flooring America, Meadville, Pa., citing the typical retailer reaction.

In some instances, retailers say consumers are doing price comparisons among LVT-sourced products, with some choosing domestic products or those sourced from countries other than China.

In the two years since the trade war heated up, flooring distributors and retailers have eyed alternative sources for their LVT stock. At Frazier’s Carpet One Floor & Home, Knoxville, Tenn., for example, roughly one-third of its stocking LVP SKUs are from China; the remaining two-thirds are sourced from Vietnam, South Korea or the U.S., according to Kevin Frazier, the store’s owner.

“So, that’s about 28 of our 45 stocking SKUs that are not from China,” he explained. “Specifically, Shaw’s COREtec Pro Plus is from South Korea—that’s a good-sized piece of business; Mohawk’s SolidTech Plus is from the USA—that’s also a good-sized piece of business—and I have two distributor-based programs (from BPI and All South) where we stock SKUs sourced from Vietnam. And, no, the tariff has not slowed our LVP sales.”

Eric Mondragon, hard surface buyer for Salt Lake City-based RC Willey, with 15 locations across four Western states, told FCNews that the effect of the tariff will not necessarily lead to a decline in SPC sales, but rather a change in market share by vendor. “Smaller vendors are using this opportunity to grab market share from the larger vendors by passing on smaller increases and offering price points the larger vendors are no longer able to offer,” he said. “The average retail price point may not change, but the products that fit in that spot will.”

Ironically, Mondragon said he has seen an uptick in water-resistant laminate, an observation shared by others. Still, for the bulk of flooring dealers, LVT remains the go-to segment, with rigid core leading the charge.

So far, at least, tariffs are proving no impediment to category growth. “While 25% is a steep tariff, I believe LVT will remain very strong,” said Kevin Rose, owner of Carpetland USA, Dixon, Ill.

LVT-related products account for almost half of all the goods sold at Terre Haute, Ind.-based Smiddy’s CarpetsPlus ColorTile, and that is not likely to change, according to Dan Smiddy, co-owner. “We recently went over every price tag in the store and added the tariff costs into our mark-up. The tariff has made everything more costly. We’ll explain it to our customers and hopefully they will understand and still buy. Right now, LVT is super-hot for us.”

Billy Mahone III, manager of Atlas Floors Carpet One, San Antonio, said he expects the reinstated tariffs to have a small impact on the sale of his LVT-related products. “With the resulting price increases there will naturally be some customers who switch to an alternative solution like porcelain tile or waterproof laminate. However, there seems to be an increasing number of WPC/SPC products sourced in other countries that aren’t impacted by the tariffs.”

Must Read

Daltile, Gensler collaborate on new tile lines

Dallas, Texas—With Gensler, a leading global design and architectural firm, serving as the design consultant, Daltile recently created and launched three new tile lines—My...

EJ Welch to acquire controlling interest of T&L

By Ken Ryan EJ Welch Company, a division of Center Rock Capital Partners’ Merit Distribution Group, has signed a letter of intent to acquire controlling...

Flooring Markets open for registration

Marietta, Ga.—Market Maker Events (MME) is moving forward with its regional Flooring Markets for the first quarter of 2021, and registration is now open....

Rick Cain elevated to president of Fabulous Floors

Carrollton, Texas—Fabulous Floors has named Rick Cain—formerly vice president of sales—to president of the company. He takes over for Joel Alhadef, who is retiring...

Building community during COVID-19

By Ken Ryan The way you behave during a crisis like COVID-19 is what your customers will remember—not what type of sale you ran or...

Obituary: Mohamed Farid Khamis, Oriental Weavers founder

Atlanta—Mohamed Farid Khamis, founder of Oriental Weavers, passed away at Emory Hospital, here, on Sept. 19, 2020, due to complications from a long-term illness. Khamis...

As seen in

August 24, 2020

DOWNLOAD
X