Flooring dealers certainly faced stiff headwinds in 2022, from inflationary pressures to labor shortages to fears of a looming recession. And yet, as the year draws to a close, many dealers find themselves in a good spot, with some reporting numbers that eclipsed 2021’s record year. Even those who didn’t experience record growth often fared better than expected.
Clearly, most flooring dealers would be thrilled with a flat 2022 in light of 2021’s pandemic-infused sales performance. However, FCNews found several flooring dealers that topped last year, fueled by a strong start and higher-ticket transactions throughout the year.
“Going into the year I felt single-digit growth was probably in order based on a variety of factors including our record performance in 2021,” said Craig Phillips, president/CEO, The Flooring Edge, with three Ohio-based flooring stores. “The first five months of the year our business was up 20% year over year. It looked like nothing was going to slow it down. Price increase after price increase had little or no effect. All buckets of our business were showing nice growth. In May, the retail business started cooling off and has not recovered through the fall. We will finish 2022 up about 12%, which is being driven by nice growth in our commercial and multi-family businesses. We are fortunate to have the best flooring professionals in the business working with us, from our warehouse and administrative teammates to our sales staff. They all stepped up in an extremely challenging time for our industry and really shined. For that I am so grateful.”
Phillips is not alone in sharing positive results. Regardless of location, many flooring dealers found ways to succeed despite myriad obstacles. “Due to such an incredibly strong first half of the year, we’re still experiencing substantial growth,” said Casey Dillabaugh, owner of Dillabaugh’s Flooring America, Boise, Idaho. “We’re expecting to finish the year with double-digit growth due to a variety of contributors, including an initial strong residential construction segment, product inflation and internal improvements. We couldn’t be happier as we’ll once again set personal sales records and our company is as healthy as ever from a culture standpoint.”
In Knoxville, Tenn., there was a similar report from Frazier’s Carpet One Floor & Home, which will surpass its 2021 record by 9%. “2022 has been our best year ever, and we are thrilled,” said Kevin Frazier, owner. “Certainly, we all continue to face plenty of challenging uncertainties, but the blessings and opportunities genuinely seem to outweigh the pain points, at least in our market.”
Montgomery’s CarpetsPlus ColorTile in Venice, Fla., sidestepped category 4 Hurricane Ian in September to produce a revenue year that is exactly on track with 2021. Located in fast-growing Southwest Florida, where many retirees/snowbirds reside, Montgomery’s capitalized on robust business activity from retirement center as well as two new accounts—including Sarasota Memorial Hospital. “We are fortunate that these retirement accounts are always open and operating,” said Mike Montgomery, co-owner.
Like many flooring dealers, Abbey Carpet & Floor in Anniston, Ala., dealt with a slowdown in retail sales that began in the first half and never really recovered, which is why having a diversified business approach is so important. “It looks like we are going to be about 2% down from last year,” said Ted Gregerson, owner. “Retail sales have been really soft the last half of the year. However, our commercial sales have been up; 2021 was a record year for us, so we are ecstatic with only being down about 2% given how slow traffic has been the last six months.”
Relying on best practices
The successful flooring dealers always seem to know how to navigate the inevitable ebbs and flows of business. Each year is different, of course, and 2022 featured 40-year-high inflation, forcing retailers to adjust their pricing amid escalating raw materials costs.
A case in point was Montgomery’s, which adjusted its pricing as the cost of materials and labor were increasing. “We did this as quickly as possible to maintain our margins,” Montgomery said. “We increased labor rates as well to adjust for all the rising costs of gas, housing, insurance, etc. That allowed us to keep our most valuable asset—installers.”
For others it was about staying aggressive and being proactive. “Promotions continue to be huge for us as they bump up volume, cash flow and customer interactions,” Frazier said. “At a time when everyone seems to be teetering between growth and contraction, promotions have been the nudge to consistently push us over the edge into continued growth.”
For Abbey Carpet & Floor, it was about continuing to advertise and fine-tuning inventory levels. “During good years, it always seems like inventory grows more than what is needed,” Gregerson said. “We get all retail sales paid in full at the point of sale. Not only does that help cash flow during slower times, but it saves us from having to chase money after the installation and having to write off bad debt periodically.”
Nampa Floors & Interiors, Nampa, Idaho, will finish 2022 ahead of last year’s record year—no small feat given the bevy of obstacles in its path. “I am incredibly proud of our teams for having spent the last year focusing on overcoming obstacles and market conditions we can combat while not wasting time and efforts on factors we cannot control,” said Kyal Wilson, CEO. “We’ve added to our advertising budget and shifted ad spend to mediums more relevant to our consumers. We’ve also invested in a CRM tool to increase efficiencies in the sales process. In addition, our strong diversification has allowed us to maintain the trust of dedicated subcontractors as we’ve watched segments of the market slide while others increased exponentially.”
Return to normalcy
Over the past three years consumers have dealt with the COVID-19 pandemic and its resulting restrictions, supply chain slowdowns and, now, high inflation. And yet, the flooring economy continues to truck on. “The customers that do come in are definitely buying,” Gregerson said. “They are also spending more money, so the average ticket size has gone up fairly dramatically. Our gross profit percentage has also gone up this year, as we have focused on that.”
Nampa’s Wilson observed that customer habits may have shifted but they remain resolute and ready to buy. “I truly believe customers are longing for some semblance of stability and normalcy,” he explained. “They’re tired of hearing about diseases, killer flying insects and how much less the dollar is worth every day. While we’ve made a lot of changes over the past year, we’ve maintained a positive customer-centric model with a knowledgeable, compassionate and communicative approach and this has provided the stability and normalcy our customers are searching for.”
The Flooring Edge’s Phillips thought back over the last three years to what the flooring industry has been through. “Some of it no one could have even imagined,” he said. “But I know we will all be just fine.”