Distribution: Wholesalers weigh impact of pandemic

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By Ken Ryan

Flooring distributors have dealt with slowdowns and recessions before, but usually they had time to prepare in advance. Not this time around, as COVID-19 arrived quickly—and with a vengeance. “COVID-19 changed everything we do every day in our personal lives as well as our business,” Keith Slobodien, president of Apollo Distributing Company, Fairfield, N.J., told FCNews.

“COVID-19 slowed down freight and had a significant impact during the first half of Q2,” said Anne Funsten, president of B.R. Funsten, Manteca, Calif. “Suppliers and freight companies alike have had employees out sick/quarantining, which has slowed down both production of new products and the ability to deliver them in a timely manner.”

COVID-19 impacted business segments differently. For example, while builder remained strong, commercial is down—especially corporate as many businesses adopted work-from-home policies that could be a lasting trend. “We don’t see commercial coming back until late 2021,” said Paul Castagliuolo, president of Belknap White Group, Mansfield, Mass. “Supply chain issues are also a concern—meaning the availability of raw materials for manufacturers, transporting finished goods, the shutting down of production lines and the upward pressure on costs.”

Less discussed but still important are the safety concerns borne out of COVID-19 that have impacted business. Scott Rozmus, president and CEO of FlorStar Sales, Romeoville, Ill., noted COVID-19 safety concerns have taken a significant consumer of flooring—especially people 60 years and older—and somewhat sidelined them from the independent channel.

“This demographic generally is willing to pay for high service and better goods, albeit they want problem- free installations and great design,” Rozmus said. “Unfortunately, these same customers have had to safeguard against COVID-19, which has prompted some to simply delay or avoid purchasing floor covering or to procure floor covering but delay the installation out of concern of contracting the virus. Add to this phenomenon all of the uncertainty regarding schools reopening and how they’d operate, and you have an even larger pool of flooring consumers that may be in the market—or even had bought goods—but are delaying installation. So, we have demand that is being delayed or unfulfilled. Ultimately, this could be a good thing, but in the short term it has prevented some realization of business.”

Galleher president Jeff Hamar said COVID-19 has forced businesses to take a hard look at their operations as they prepare for the future. “What COVID-19 is going to do is completely fast forward what would have happened in our economy anyway—with regard to retail, remote working, focus on home and family, safety—which is going to affect business in profound ways. Two things will drive distribution going forward: how you position yourselves in a post-COVID-19 world that is fundamentally different, and how strong your propriety brands are.”

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Oct. 26/Nov. 2, 2020

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