By Ken Ryan Following a strong start to 2021, flooring dealers see no reason for a slowdown as they enter the second quarter. In fact, many say the best is yet to come as the residential sector in particular continues to fuel a surge in business.
Not even the specter of a supply chain slowdown that has impacted commerce globally can dampen the flooring parade, retailers told FCNews. In most cases, flooring dealers say they planned in advance to have fresh stock on hand for any possible shortage.
“My expectation for Q2 is a continuation of strong demand for flooring both residentially and commercially in our markets,” said Greg Loeffler, COO of Pierce Flooring & Design, with three Montana locations. “Home remodel and new home construction both remain strong and growing, with no indication in sight of a reversal to this trend.”
Loeffler’s experience was in sync with what other flooring dealers are experiencing from the Pacific Northwest to the Southeast. “Our first quarter was one of our best ever, and I expect the second quarter to be better yet based on the orders and jobs we have scheduled for the next three months,” said Don Cantor, owner of Chelan, Wash.-based Lake Interiors Chelan. “Every segment of our business is clicking. We are busy with lots of new construction, remodels and water restoration build backs. We also have several condominiums and vacation rentals that we work on. We are also selling a lot of kitchen and bathroom cabinets and countertops as well as Hunter Douglas window coverings with motorization.”
In Knoxville, Tenn., Kevin Frazier, owner of Frazier’s Carpet One Floor & Home, said he has “explosive expectations” for Q2. “Q1 is already up 22% for us over last year, and last year our Q1 was a record setter,” he said. “It’s like that old Buck Owen’s song, ‘I’ve Got a Tiger by the Tail.’”
Frazier said carpet and luxury vinyl plank are both on a tear and have been for about 20 months. “Additionally, I have been pleasantly surprised that hardwood is holding as steady as it is—around 18% of total sales for us,” he noted. “Even with all of our forecasting and planning and staging, too much business is going to be our biggest challenge in both Q2 and Q3.”
Keeping pace with frenzied activity has been a challenge even for legacy retailers like O’Krent’s Abbey Flooring in San Antonio, which has more than 100 years of retail experience. “It’s not slowing down, I can tell you that,” said Sam O’Krent, owner.
Business at O’Krent’s was already busy even before the historic Texas freeze in February that led to a bevy of broken pipes that will require flooring to be replaced. “Now, it’s crazy busy,” O’Krent said. “It’s challenging just to keep up. Our RSAs are exhausted; our installers, which we didn’t have enough of to begin with, are maxed out. Everyone should be busy.”
Busy would be an apt description for fellow Abbey dealer Ted Gregerson, owner of Ted’s Abbey Carpet & Floor in Anniston, Ala. His business was up 10% in the first quarter from last year, and more of the same is expected in the second quarter. “Customers just keep coming through the doors and buying,” he said. In particular, his business has benefited by a huge uptick in his tile and stone business, which has been fueled by the popularity of kitchen and bath makeovers.
For Marshall Carpet One & Rug Gallery, Q1 2021 was the best quarter its 55-year history, and there are no signs of a slowdown, according to Matt Wien, director of sales for the Mayfield Heights, Ohio, store. “Our expectations for Q2 are to keep this train rolling full steam ahead,” he explained. Wien said commercial, which had been the lagging segment, is on the rise as well.
The normally harsh winter in North Dakota didn’t keep customers away from Carpet World of Bismarck. “We expect Q2 to be much like Q1—busy, busy, busy,” said Jon Dauenhauer, co-owner, noting that the hard surface flooring segments rigid vinyl plank and waterproof laminate have continued to dominate the market.
Flooring dealers say they aren’t sure if this pace of business can continue long term. But, for now, they are enjoying it. “As we say around here, ‘Fish while the fish are biting,’” O’Krent said.
Freight’s impact
The potential fly in the ointment for retailers has been—and will continue to be—the global slowdown of freight, which has led to shipping delays and shortages in some instances. However, flooring retailers have, for the most part, mitigated the damage with long-term planning.
“We’re booking six to eight weeks out for installation, so that gives us time to deal with backorders,” Marshall Carpet One’s Wien said. “We are concerned about what the next three to six months holds with the shortage of raw materials due to the Texas snowstorms. We are currently trying to plan for that.”
As the supply chain challenges increase, some flooring dealers say they have taken a hit on margins by offering customers an upgrade for no additional cost in order to save the sale. “We have definitely increased our inventory levels from where they normally would be, and reorder much sooner than we would like,” Ted’s Abbey Carpet & Floor’s Gregerson said. “We have instructed salespeople not to promise anything until they check to see if the material is available. Seems that would be the norm, but our suppliers in the past have always had what we needed, so our salespeople have gotten overconfident at times.”
Pierce Flooring took a very aggressive approach to its stocking inventory levels over the past several months and increased inventory wherever possible. “Our direction to our sales team is ‘sell what we own’ to reduce the effects on our service level and timeliness due to backorders and shipping delays,” Loeffler said.
In anticipation of supply-chain headaches, Frazier’s Carpet One has been over-stocking for almost a full year. So far, it has worked out. “Let’s be honest, those supply chain headaches were visible on the horizon as early as April of 2020,” Frazier explained. “We have dealt with this—and any other supply chain challenges that might pop up in carpet or hardwood—by forecasting our stocking needs much farther out into the future than we did prior to April of 2020.”
The supply chain slowdown has forced some customers of Lancaster, Pa.-based Indoor City to make other product selections to keep projects on schedule, according to Ryan Commerce, owner. “While supply chain disruptions and installation backlogs have certainly presented some challenges for our team, I welcome these challenges because it was just over a year ago when we were forced to shut down our operations with no idea when we would be allowed to reopen. With the written sales we had in Q1, I know our install teams will be very busy. Demand across all of our business segments remains strong.”
