Skip to main content

Catalina says U.S. Flooring Industry Set for Spring Thaw - Who Will Benefit?

FLOOR COVERING STATISTICAL TRENDS AND OUTLOOK

In my February 11th post I asked the question “Are Floor Coverings Sales On Schedule For A Spring Recovery?"  The answer is yes. Based on the March 2010 Catalina Floor Coverings Quarterly Update, the U.S. floor coverings industry is on track to show a 1.4% increase in square foot floor coverings sales (shipments, minus exports plus imports) in the second quarter of 2010.  This would be the first increase in quarterly floor coverings sales since 2006. Now the question is . . . 

. . . . who will benefit from this “Spring thaw?”  The answer seems to be retailers catering to the do-it-yourself (DIY) market and the products purchased for DIY projects.

The recovery in the residential replacement and remodeling market is being driven by do-it-yourself projects because the important first time home buyers are more likely to have lower income than the average homeowner and sluggish personal income gains have caused a shift to lower priced flooring projects.

The growing importance of DIY projects has allowed the major home center chains and Lumber Liquidators to increase share on the retail level because these retailers cater to do-it-your-selfers.  We estimate those retailers accounted for 24.7% of total U.S. floor coverings retail sales in the fourth quarter of 2009, up from 22.0% in the fourth quarter of 2008.

The trend towards DIY projects may also change the product mix of the hard surface flooring to click-able installations such as engineered wood and laminate flooring, and the newly introduced vinyl planks. I mentioned this in my post last month in Is Hard Surface Flooring Growth Just A Click Away?  This trend can be seen in the sharp increase in laminate flooring sales at Lumber Liquidators in 2009.

Overview of Statistics Leading the Flooring Industry Recovery
The improvement in industry sales is due to the turnaround in domestic housing demand since the third quarter of 2009.  Total housing demand rose by about 20.0% in the fourth quarter of 2009, and could rise by 7.1% in the first quarter of 2010.  These gains were due to the surge in existing home sales.  Existing home sales rose by 26.1% in the fourth quarter of 2009 and are estimated to rise by 7.4% in the first quarter of 2010.

The rebound in existing home sales is being driven by positive reaction to declining home prices, low mortgage rates, and the $8,000 first time home buyers’ tax credit (a $6,500 tax credit was extended to all homeowners from December 2009 to April 2010).  As a result, floor coverings manufacturers and marketers are sharply increasing dependence on the residential replacement and remodeling market.  However, the estimated increase in industry sales continues to be held down by a weak builder market and sharp drops in nonresidential demand.

Hard Surface Flooring  Gaining Share Overall
I think we will see  hard surface floors could gaining some share in the first quarter of 2010 due to the increasing popularity of  DIY products,  especially lower priced products such as  LVT and laminate.  Consumers’ growing preferences for lower end flooring lines over the past two years have caused a decrease in share for wood and stone flooring but we’ve noticed ceramic has gained share over the past two quarters due to inventory replenishment.  The supply chain could have been pretty thin after two years of sharp ceramic tile sales declines.  Overall,  the hard surface category should pick up share this year.

Let us know at the Floor Coverings Institute how you are benefiting from the “spring thaw.”

Stuart

Stuart Hirschhorn is a member of the Floor Covering Institute and Director of Research of Catalina Research, Inc. which provides in-depth market research on the floor covering industry.

Comments

  1. Quality Floors DirectMay 21, 2010 at 1:25 PM

    Things have begun to improve, and I do believe that if we hold on for the ride, we can make it. I have noticed a decrease in wood floor demand, but the increase in alternatives has brought about a balance.

    ReplyDelete
  2. Stuart HirschhornMay 21, 2010 at 4:27 PM

    Quality Floors Direct I was glad you were able to hold on for the spring upturn. I will follow up with the most recent data and thoughts on the second have next week.

    ReplyDelete

Post a Comment

Popular posts from this blog

Concrete Moisture Leading to Flooring Failures - Is this an Epidemic?

Sheet vinyl  lifting off concrete substrates that looks like blistered skin from a burn, wood flooring turning up at the edges, carpet tiles emitting foul odors from reactions with “wet” slabs.  All of these failures in floor covering occur daily around the country plaguing flooring contractors and end users.  Is this a flooring conspiracy or something more sinister?  Well, it’s not a conspiracy, nothing so colorful as that, and it’s not sinister unless you consider that moisture lurking in the substrates is skulking around waiting to pounce. What are the reasons for this outbreak of flooring failures?  Have adhesives changed?  Is flooring material different?  Hasn’t concrete been the same for years?  Why is this all happening now? Adhesives have changed from when solvent carriers were used but adhesives are actually better now.  Flooring products have changed with the onslaught of non-permeable backings which can trap moisture vapor emissions coming from concrete.  Concrete hasn’t

Intelligent merchandising in the floor covering showroom

Donato Pompo In a ceramic tile and stone showroom the two biggest challenges for customers are  visualizing how the tile or combination of tiles will look installed in the home and determining which tiles are suitable for their intended application. Figuring out how to address these two challenges should be a priority for every showroom. Along with that, conveying the features, benefits and limitations of the products is the next challenge. And perhaps the most important piece of the showroom puzzle, is to train sales people so they are knowledgeable and competent showroom consultants (I wrote about this previously on the blog in, How Training and E-learning Can Improve ROI ).   Years ago, when I was an importer and distributor with several showrooms I coined the term Intelligent Merchandising to represent the approach we developed to help our customers make selections and our sales people more effective in assisting our customers during the selection process. The challeng

Will Chinese Drywall VOC Issue Affect Flooring?

Chinese drywall shares commonalities with flooring, particularly as it relates to VOCs. If you’re new to the flooring industry you may be surprised to learn that last decade it was necessary for the Consumer Product Safety Commission (CPSC) and the Environmental Protection Agency (EPA) to anoint carpet as a safe product . The proclamation was due to flawed tests perpetrated against the carpet industry by Anderson Laboratories . But the issue isn’t dead if you search the Internet. There are still sites that support Anderson Labs. Even a "green" industry site writes “ A rash of alleged health problems with carpet have yet to be properly explained, suggesting that all carpets, and especially the less expensive synthetics, should be used with great caution .” The drywall industry is going through a similar experience. Two major differences: 1. They’ve pinpointed it to some drywall made in China. 2. It’s true and real, and no one is suggested it isn’t destroying homes and p