Tuesday, June 7, 2011

Catalina reports market update on resilient floor covering sales and growth opportunities

FLOOR COVERING STATISTICAL TRENDS AND OUTLOOK

S. Hirschhorn
 After five years of reporting on sluggish floor covering demand, I am glad to present a positive story - the growing selling opportunities in resilient flooring.

Fiberglass-backed sheet vinyl has had some of the sharpest flooring gains over the past three years making resilient replacement sales the strongest growing market between 2007 and 2010. We now estimate that in 2011 resilient flooring will reached 17.8% of total US floor covering sales. Manufacturers are making big investments in the product category and consumers are responding well to the new product lines.

 Resilient flooring manufacturers have used their price competitiveness to entice consumers seeking value priced products and introduced products that stimulated interest by residential and commercial customers.  Resilient’s success is due to a combination of these factors:
•  Resilient – a value-priced product line.  During 2011, resilient flooring is expected to sell at $0.74 per square foot, in manufactures dollars.  This compares to a U.S. industry average of $0.98.  The gap has narrowed in recent years as resin prices increased sharply, however consumers have increased their preference for value-priced products as the recession cut incomes and home prices.
•  Consumers responding positively to the introduction of new and innovative products.   The growth of new luxury vinyl tile and fiberglass-backed sheet vinyl, which have had strong growth in the last three years,  contributed to making resilient flooring residential replacement sales the strongest growing flooring market between 2007 and 2010.  The recent introduction of click LVT could continue to make residential resilient sales a growth market.
•  Rubber, linoleum, and cork products offering commercial users environmentally friendly and sustainable flooring products.  These niche products have made significant inroads in the commercial remodeling and replacement market, especially the growth-oriented healthcare markets.
Due to these factors, we estimate resilient will reach a 17.8% share of the U.S. floor covering market in square foot sales. This is up from 15.3% in 2007 and only 12.6% in 2002 (see chart).

Manufacturers are making investments in production capacity and distribution. As resilient products increase their position in the U.S. floor coverings industry manufacturers are investing in domestic production and distribution capacities. For example, Armstrong invested $25 million in next generation fiberglass-backed sheet vinyl that incorporates MasterWorks 3D technology.  IVC recently opened a new $75 million facility in Dalton, Georgia to manufacture fiberglass-backed sheet vinyl, and also signed a distribution agreement with CCA Global in 2010 for it fiberglass-backed products.  In addition, Shaw signed an agreement with LG Hausys in 2010 to be its exclusive seller in the United States and Canada. 

I’d love to know how you are taking advantage of the growth and opportunities in resilient flooring and how your customers are responding to the new resilient products.

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. 

Read more about resilient growth in Fiberglass growth rate prompts investment - Floor Covering Weekly May 9, 2011.

Check out Stuart's other posts in the Hirschhorn Blog Roll

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