By Ken Ryan
Flooring retailers entered 2021 with a strong wind at their backs and say they are confident the momentum generated in the second half of 2020 will carry them through the first quarter and beyond. More than a dozen dealers told FCNews that while Q1 has its uncertainties—including a new administration taking over and COVID-19 still a major threat—they believe the ingredients exist for more sustained success.
“Our expectations for Q1 are pretty high,” said Phil Koufidakis, president of Baker Bros., an NFA retailer with multiple locations in the Phoenix metro area. “We feel like there is double-digit growth out there. Mostly this will be fueled by residential replacement/remodel. As interest rates stay low and people continue to work from home for the foreseeable future, we anticipate housing sales and specifically resales to stay strong. All of this, of course, is based on some stemming of the COVID-19 tide with the implementation of the vaccines.”
The specter of COVID-19 remains a wild card, according to retailers. January could represent the peak of new cases and deaths from the pandemic, according to some health experts, and, so far, the rollout of the multiple vaccines has been slower than forecast. And yet, despite this, good vibes persist. “The third and fourth quarters of 2020 were very strong for our retail business, and we are not seeing any indications of that slowing down,” said Sam O’Krent, owner of O’Krent’s Abbey Flooring Center, San Antonio. “We feel consumer optimism will only increase as vaccines are distributed and the COVID-19 pandemic starts to get under control.”
Nick Freadreacea, president of The Flooring Gallery, Louisville, Ky., said pent-up demand to get home improvement projects done has continued. “We have a large backlog of work to be installed, and the pipeline is constantly being replenished. Builder and multi-family show no signs of slowing and the weather will control retail. 2020 ended on a strong note, so that bodes well for the first quarter of 2021. All in all, it seems positive to me.”
Positive also aptly describes Casey Dillabaugh’s outlook as president of Dillabaugh’s Flooring America in Boise, Idaho. Well before the pandemic, this capital city was experiencing a major growth spurt, and it has continued throughout 2020. “The migration of people to a more conservative, less populated area has definitely benefitted the Boise market,” he said. “When you add this to the shortage of new home builders, the price of existing homes has increased. Those homeowners—forced with the decision to sell or improve—are faced with a difficult decision to increase a monthly mortgage or invest into their existing space. We’re seeing the majority of them decide on improving what they currently have. This leads to the benefit of a market that’s good from both a new construction and retail perspective. Since Christmas, we’ve already seen an increase in activity on both levels and foresee that only picking up steam.”
Desirable locations continue to benefit retailers on the East Coast as well. In Columbia, Md. (named the Safest City in America by WalletHub for the third year in a row), The Vertical Connection Carpet One Floor & Home is looking to leverage its core strength—retail—in 2021. “I expect business to be solid,” said Adam Joss, co-owner. “The housing market should continue to show strength, particularly in the suburbs where we play. Stimulus checks are hitting and there could be more to come with the new administration. I believe future vacation spending may start to eat up some of the disposable income of our customers. Fingers crossed that we could get through Q1 without it disrupting life and business too much.”
Taylor Carpet One Floor & Home, in Fort Myers, Fla., has benefited by the presence of snowbirds and transplanters relocating to Florida’s west coast, according to owner John Taylor. “We are going into 2021 with a very positive outlook,” he said. “The real estate market is hot, and growth is evident all over. We had double-digit increases in the last quarter and believe it will continue to flow into the first quarter of 2021 and beyond. The traffic into our stores continues to be strong and most of what we are seeing is residential [renovations], which is really our forte.”
Retail continues to be the engine that drives business at Sterling Carpet & Flooring, Anaheim, Calif. As Dan Mandel, co-owner, explained, “Retail has been our horse and really where all the growth has been. We had a great 2020 despite the pandemic and material shortages, so we will continue to be very bullish about 2021.”
As with many other retailers, Carpetland USA (The Langan Group), with multiple locations in Iowa and Illinois, roared back from a soft March 2020 to post a strong second half fueled by the stay-at-home economy. “My best estimate is that we could expect to be flat or up 4%-5% in the first quarter of 2021,” said Eric Langan, owner, citing the ongoing COVID-19 pandemic as a potential impediment.
COVID-19 is a major issue in the Houston market, according to Sam Roberts, president of Roberts Carpet & Fine Floors, which operates multiple locations. Roberts predicted vaccine distribution will take some time to be fully implemented, which makes accurate forecasting a challenge. “By the end of the second quarter, I think everyone over 18 who wants it will have it,” he said. “I think the second quarter, and going forward, is much more projectable with greater confidence especially on the retail side.”
Eric Mondragon, hard surface buyer for R.C. Willey, Salt Lake City, echoed a sentiment shared by many of his retail colleagues. “As long as businesses can remain open and consumers sentiment is high, we could see double-digit growth in Q1.”