Dealers contend with latest round of price hikes

Home COVID-19 COVID-19-home Dealers contend with latest round of price hikes

price hikesCiting rising costs in raw materials as well as container/port constraints, flooring manufac­turers have once again announced price hikes across sev­eral product categories. Retailers say they can ill afford to absorb more increases and plan to pass the costs onto consumers.

At press time, Shaw Industries, AHF Products and Mannington/Phenix officially disclosed plans to increase prices. While other major suppliers declined to comment, flooring retailers surveyed by FCNews say their main suppliers have said they will increase prices.

In a letter to its retailers, Shaw Industries cited the continued escalation of raw materials, as well as rising logistics and labor costs for its decision to hike prices. Specifically, Shaw Industries will increase prices on residential carpet and all cate­gories of hard surfaces 5%-7% with a mini­mum of $0.27 per yard on carpet, $0.06 per foot on flexible LVT and $0.10 per foot on rigid LVT. These prices took effect with orders placed March 8 and shipments effec­tive March 22.

“We are grateful for the strong residen­tial flooring business climate,” said Scott Sandlin, executive vice president – residen­tial, Shaw, in a letter to retailers. “As you are likely aware, almost every building product’s supply chain is experiencing infla­tion in order to meet mar­ket demands. Raw material costs have increased rapid­ly over the past few months, and we feel this escalation will continue throughout the remainder of 2021. Container and port constraints along with other transportation pre­miums continue to increase the cost to keep flooring products moving. These strong and ongoing headwinds leave us with the need to increase pricing.”

AHF products announced it will increase prices on hardwood products in the U.S. and Canada effective April 1, 2021. The increase averages 5% on the company’s engineered hardwood produced in the U.S. and Asia (excluding Cambodia) and 3% across domestically produced solid hardwood. The price increase—which will be effective with orders placed on April 1 and shipments made after April 30—will impact products across AHF brands, including Bruce, Robbins, Hartco and Capella. “Across several of our locations, we are experiencing continued raw material cost inflation on key wood flooring components, including lumber and core materials,” said Chris King, vice president-sales. “As a result, we find it necessary to increase hardwood prices on certain products.”

Mannington residential and Phenix Flooring announced price increases on select hard and soft surface flooring products. Effective with shipments beginning April 19, the following hikes will go into effect: Mannington hardwood, laminate and LVT are going up 4%-8% with a minimum $0.10 per square foot on LVT; Phenix LVT prices will rise 4%-8% with a minimum $0.10 per square foot; and Phenix carpet will increase 4%-8% with a minimum $0.27 per square yard. The increase will apply to all shipments in the U.S. and Canada. Mannington previously announced a 3%-5% increase on residential resilient sheet products effective March 29.

Bad timing

The price hikes are coming at a time of continued strength for flooring retailers, many of whom are trying to keep pace with a busy pipeline of projects. “Demand is running wild right now and will only increase throughout 2021 as more states that have been shut down due to COVID-19 are reopening,” said Kevin Frazier, owner of Frazier’s Carpet One Floor & Home, Knoxville, Tenn. “In fact, if the economy stays this hot, I imagine we will see another attempt at a price increase in late July and again in late September.”

Most dealers said they are not in a position to absorb any more price increases, citing previous rounds. “We plan to pass it on,” Adam Joss, co-owner of The Vertical Connection Carpet One Floor & Home, Columbia, Md., told FCNews.

Likewise, Steve Weisberg, owner of Crest Flooring Allentown, Pa., said the store cannot eat any more increases, but isn’t too worried about sales. “In the long run, it shouldn’t affect consumer purchases, but it sure is a pain changing everything, especially when it’s busy.”

Carlton Billingsley, co-owner of Floors and More, Benton, Ark., agreed, noting that residential customers understand price increases simply because inflation is hitting many other segments as well these days. “Price increases usually create a sense of urgency to close deals in the works before implementation,” he added. “It definitely creates more work but is necessary to continue to be a healthy business.”

While there is no doubt raw material costs are rising and supply chain issues are contributing to the latest round of increases, one retailer FCNews spoke with suggested profit taking was the underlying motive. Following a discussion with a supplier, he said, “This is not an ‘unexpected jump in costs price increase,’ this is a straight out ‘demand is high, production is back online, so let’s all make some money’ price increase. And that’s OK, this is America—it is still a capitalist country.”

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March 15/22, 2021

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