By Ken Ryan It has been well chronicled that business for the vast majority of flooring retailers has flourished since the stay-at-home economy sprouted from the COVID-19 pandemic. And within that growth, home renovations in particular have surged, with bigger ticket items and projects dominating.
The Kitchen and Bath Institute, for example, recently reported that larger, more professional-intensive projects are slated to increase in 2021 as homeowners indicated that improving the home’s aesthetics are the main motivators for remodels in the bathroom (16%) and kitchen (15%), followed by maximizing quality and durability and increasing the value of the home.
The statistics are borne out in flooring where retailers are struggling to keep pace with homeowner activity. From Tennessee to Montana, Alabama to Iowa, dealers are reporting a strong start to 2021, and they are bullish on the foreseeable future. “In our region, the real estate market for pre-existing homes is hotter than it was in 2007, so that alone would drive strong home improvement/renovation activity,” said Kevin Frazier, owner of Knoxville, Tenn.-based Frazier’s Carpet One Floor & Home. “But you mix that with the COVID-19 effect, and—at least in our neck of the woods—you have super-heated home improvement/renovation activity.”
Pierce Flooring and Cabinet Design Center, with locations in Billings and Boseman, Mont., (and Pierce Flooring & Design in Missoula), continues to see above average activity in home remodel projects, with a trend toward larger remodel projects. “I believe this is driven to a large degree by ‘flippers’ taking advantage of a very strong housing market,” said Greg Loeffler, COO. Nonetheless, he added, “I expect we will continue to see very strong demand for flooring and cabinets through the first quarter of 2021 and beyond. We are not seeing any real signs of a slowdown at this point.”
For Anniston, Ala.-based Ted’s Abbey Carpet & Flooring, the renovating and remodeling of homes is the foundation of its business. In 2020, it reported a record year as consumers were making improvements to their homes. “We have seen no slowdown in this trend, as we started 2021 off with a very good January,” said Ted Gregerson, CEO. “Our average ticket size increased dramatically during 2020 over the previous five years and, once again, that trend is continuing at least for now.”
Gregerson said the outlook for the first and second quarters of 2021 in his market “is very good,” adding that every indication is that business will continue at the current pace and people will continue to spend money on home improvements.
Bigger projects, higher tickets
Larger home renovations/projects equal higher tickets for most flooring retailers. That has been the recent trend, and not even the January-February winter doldrums has dampened expectations. Eric Langan, owner of Carpetland USA, with multiple locations across Iowa and Illinois, said his first quarter is often dictated by winter weather conditions.
Well, the winter has been rather harsh in America’s heartland and yet Carpetland USA has enjoyed robust activity. “We’re seeing larger tickets with multiple rooms involved,” Langan explained. “We had a $30K-plus residential remodel sale just the other day. I expect business to be good for the next few months as long as we don’t see another uptick in COVID-19 cases or a new strain of COVID-19 causing government mandates and shutdowns. We’re fortunate to be benefiting from this stay-at-home economy but are very respectful and empathetic toward other industries—such as hospitality—that haven’t been so fortunate.”
In western Pennsylvania, the home renovation/remodel business for Foulk’s Flooring America in Meadville is surging, with many contractors booked until mid-summer or fall with projects. “With the stimulus and added expendable income due to limited spending options we are seeing larger projects with better materials being used,” said Mike Foulk owner. “Customers are self-upgrading into nicer projects. The general feeling is home remodels are going to stay strong until summer. We are looking to stay strong through the summer months in residential, Main Street and commercial.”
Kelby Frederick, who owns My Flooring Texas in Denton, said he is also seeing a trend toward larger projects. “Our average ticket is up,” he explained. “Larger projects definitely take a little bit more nurturing in order to close. However, we find the large-ticket customer is a much more discriminate buyer, which allows us to leverage our service and credibility to earn their business instead of competing with the gimmicks and low prices that most of our competitors rely on. People continue to feel confident investing in their homes, especially as they continue to spend more time at home. Unless something unforeseen happens, we believe this trend will continue.”
Flooring retailers do wonder if this gravy train of retail activity will ebb once the pandemic is in the rear-view mirror and Americans start spending again on entertainment and vacations the way they did in the past. In the meantime, however, store owners say they want to capitalize on this rather expansive window of opportunity.
Steve Weisberg, owner of Allentown, Pa.-based Crest Flooring, was skeptical about business when the calendar flipped from 2020 to 2021. But that trepidation quickly dissipated. “When 2021 started, it seemed like the same song from most of 2020—lots of traffic in the store, lots of installations and lots of cash and carry with hard surface,” he told FCNews. “I think our residential business is up 20%, our advertising expense is down 50% and our operating hours have been reduced by 20%. We’ve always had a great relationship with remodelers and that aspect of our business has become even better during COVID-19. We have a number of jobs on the books already for 2021 that exceeds 2020.”
At Foulk’s Flooring America, the outlook is upbeat but cautious. “As the pandemic gets more under control, will consumers start looking at other avenues to spend their money instead of upgrading their property?” Foulk asked.
Other flooring retailers say they are encouraged by what they’re seeing. Ohio-based retailer Craig Phillips, who runs Barrington Carpet & Flooring (Akron), Carpet Country (Twinsburg) and the recently acquired Young’s Carpet One Floor & Home (Clinton), said 2021 is off to a great start with higher-than-normal floor traffic and conversion ratios. “Year over year, our average retail ticket is up about 21% dating back to last summer,” he said. “This tells me that while people are stuck at home, they are investing in themselves and their homes. Honestly, when the pandemic started, I was concerned about our business as a whole and the slowdown that I believed would come along with the shutdowns. Fortunately, my thoughts of business slowdown were wrong. We had a fantastic 2020—up from our record-breaking 2019. I really think the retail wave will continue through the summer and take us into the fall selling season. That being said, 2021 should be a banner year.”