The flooring industry must have missed the memo about how 40-year-high inflation, supply chain disruptions and labor shortages are supposed to hurt business. Quite the contrary here as flooring dealers turned in an impressive first half despite stiff headwinds.
Was it easy? No. Was it frustrating at times? Absolutely. However, as June ended, many flooring dealers could breathe a sigh of relief that the first half was as good as it was, warts and all.
“Unsettlingly strong” is how Adam Joss, owner of Columbia, Md.-based The Vertical Connection Carpet One Floor & Home, described the 2022 first half. “We faced a major COVID-19 wave in January, the prospect of WWIII in February/March and a steady flow of price increases throughout the first half. Despite all that, sales have been strong.”
Asked to summarize the first half of 2022, Lauren Voit, president of Great Western Flooring, Naperville, Ill., said: “In one word? Chaotic.”
Sentiments like these were echoed by more than a dozen other flooring dealers from coast to coast. The consensus among the group: yes, indeed, story traffic has slowed but ticket sizes have increased—the result being an overall better-than-expected first six months. However, these same retailers caution the second half could be a different story as inflation drags on and potentially puts a crimp in economic activity.
For now, though, retailers are counting their lucky stars. “We’re on pace to have our best year ever,” said Matt Wien, owner of Marshall Carpet One and Rug Gallery, Mayfield Heights, Ohio. “In fact, 2019, 2020 and 2021 have all been record years, and business in 2022 has been consistent and is slightly above last year. We are very fortunate to have a very loyal customer base and a hardworking team that makes this all possible.”
Fellow Ohio dealer Sheldon Yoder, proprietor of Columbus-based Budget Carpet and Flooring, said 2022 has been stellar, although retail has been spotty and June turned out slow. As with many successful retailers, Yoder seized opportunities in other segments. “Main Street commercial has been strong all year so collectively, as a company, it has been a solid year,” he said. “I think the last few years many people just stayed at home and did home remodel work instead of traveling, but those dollars are now being spent on travel and entertainment. Consumers still have cash coming out of the pandemic, which is why the first half of 2022 was soft but not terrible on the retail side.”
Homeowners still investing
Three National Floorcovering Alliance (NFA) members rated the first half of 2022 as strong to very strong. As Scott Browne, president of Macco’s Floor Covering Center, Green Bay, Wis., explained, “While inflation continues to rise, we believe consumers have prioritized investing in their home—a trend that we all hope continues.”
Greg Loeffler, COO of Pierce Flooring, with three Montana locations, said he has witnessed little interruption in business activity since the pandemic began. “I would rate the first half of 2022 as very good,” he said. “We have maintained our 2021 pace in nearly every category and—as most dealers would agree—2021 was a fantastic year. We are very recently noticing a slight reduction in sales traffic and activity—too early to say it’s the result of economic pressures or a short-term lull. Regardless, we believe we will have a great second half of the year.”
In Naples, Fla., a slowdown in traffic since mid-May hasn’t dampened what has been a successful first six months for Hadinger Flooring. “I would rate the first half of the year above average,” said Susan Hadinger, president. “Inflationary pressures have kept sales trending slightly up from last year. We are hopeful that things will even out after the summer travel season.”
First-half success is not the domain of the industry’s largest flooring dealers, either. Smaller retailers doing less than $5 million are also thriving. “2022 has gone very well for us,” said Typhannie Watson, owner of Carpeting by Mike, Somerset, Wis. “We adjusted our sales goal to reflect closer to pre-COVID-19 sales and we are right on track with that time-frame expectation. We expected it to be slower than 2021, but not by much. Homeowners are still very much interested in updating their flooring. We are excited for the last half of the year, as it is typically the busiest.”
Meanwhile, business activity in places like Arkansas has been a lot like the recent weather—scorching. As owner Carlton Billingsley of Benton-based Floors and More, explained, “First half of 2022 has been terrific as all segments of our business have seen increases. Total business is up YTD over 2021, which had tremendous growth as well. We have had some sizable projects throughout 2022, and the customer today is still investing in her home. Banks are still eager to loan money, and borrowing is still an advantage to the consumer today.”
Carpet Source USA, an FCA Network member based in Albuquerque, N.M., has made the most of its sales efforts, according to Don Lovato, president. “Our number of transactions is down significantly, yet our dollar contribution to gross profit is a little higher than the last two years, so that’s good news,” he explained. “My concern is that it won’t hold up in the second half of 2022, nor next year. I don’t think anyone knows the answer to that one, but I am watching my numbers extremely closely.”
Even flooring retailers like Great Western’s Voit, who have managed to maintain a steady flow of business, acknowledge the effort it takes to operate in today’s inflation-enhanced economy. “We are still in a high-pressure environment with limited resources—skilled labor, supply chain to name a couple— and escalating costs.”
In Southwest Florida, the red-hot real estate market has cooled down to some degree, leading to a slight decrease in traffic and sales for Taylor Carpet One Floor & Home, Fort Myers. But again, business has held up. As John Taylor, owner, stated: “Overall business is still good—just not at the same levels that we saw a year ago.”