Hope springs eternal when it comes to flooring retailers’ view of the fourth quarter, often the strongest three-month period of the year for dealers.
As has been the case all year, store owners have been walking on eggshells wondering if persistently high inflation would put a crimp in their bottom lines. But as we approach October, in a year of defying the odds, business expectations remain mostly positive.
“We know we will have to work harder for the business in the fourth quarter to maintain the sales volume we have become accustomed to,” said Bruce Odette, president/CEO of Denver-based Carpet Exchange, which operates 19 locations across the state. “With higher interest rates and the housing market slowing down, there are not as many opportunities compared to what we have seen in the past two years. We expected a slight slowdown with the consumer’s discretionary money going to record travel, and not as many people moving into new homes. That being said, we are staying even with the record numbers posted in 2021.”
The sentiment among many flooring dealers at the start of 2023 was to expect retail traffic to remain sluggish as higher interest rates dissuaded business activity. And while that scenario did play out, sales have generally exceeded expectations thanks to higher tickets and more robust commercial business.
“The first three quarters have not gone anywhere near the way we were expecting,” said Ted Gregerson, owner of Ted’s Floors and Beyond, Anniston, Ala. “While we were certainly hoping for an increase over 2022, we were actually planning for a flat year. However, year-to-date, we are actually up 14% over 2022. It has been amazing, to say the least.”
A double-digit increase over 2022 is certainly the exception given the multiple challenges dealers have contended with—and yet, the second half of the year is turning out much better than many flooring professionals could have hoped for.
“We had a solid August and have started off September nicely,” said Adam Joss, president/owner of The Vertical Connection Carpet One in Columbia, Md. “We’re looking forward to a decent fourth quarter. The comps will be easier than the first nine months of the year. We got off to a hotter start than I was expecting and then slowed when I was expecting stronger results. All in all, business has been steady and far better than some of the gloomy predictions.”
Most flooring retailers gear up for the fourth quarter by using any number of sales and financing options to prime the pump. For example, Typhannie Harker, owner of Carpeting by Mike in Somerset, Wis., worked on filling her pipeline with projects well in advance of Q4 to give her business a runway to a strong end to ’23 and healthy start to ’24. As she explained, “Planning and focusing on the goals is making a bigger difference than hoping business comes in. Sales have picked up in the last quarter due to our advertising efforts, our anniversary sale and really honing our Omnify+ advertising online to make the most out of each dollar spent.”
With few exceptions, retail traffic has slowed in 2023 while average tickets have risen. Those who have benefited by larger invoices have, in some cases, seen tickets grow to historical levels because those customers who are in the market for flooring have the wherewithal to spend big. “When it comes to retail sales, a $20,000 invoice would normally be a big sale for us,” Gregerson said. “Throughout this year, we have written countless $30,000 to $50,000 retail invoices. Our retail customers have been purchasing much better goods this year and doing entire kitchen and bath makeovers.”
Similarly, while traffic took a huge dip at Marshall Flooring in Mayfield Heights, Ohio, the average ticket sale has “skyrocketed,” according to Matt Wien, partner. “Our clients are purchasing better goods and the best service—this is our sweet spot and why we are remaining busy. We are counting on high-end goods and area rugs over the final three months.”
At Lake Chelan Interiors in Washington State, showroom traffic has waned, but the typical sale is much larger than last year. “We have a lot of large tile jobs scheduled for the fourth quarter, and this is the time of year that customers are coming in to get their remodels scheduled,” Don Cantor, owner, told Floor Covering News. “We are on pace to do the same volume as 2022, which was a record year.”
And Rick Oderio, president of Conklin Bros Flooring, with three Northern California locations, said he sees high-end sales as the only winning category for the last quarter. “The average sales price is higher because it is the people who have the money that are spending—and they buy better goods.”