Mohawk’s Lorberbaum Optimistic for Retail
Kissimmee, Fla. -- More than 1,000 retailers descended upon Mohawk’s Edge Summit, held at here at the Gaylord Palms Resort & Convention Center December 6-9, where Mohawk presented them with new products, merchandising and marketing ideas to help them sell more and grow their businesses.
“You are the best of the best independent retailers in the country,” said Jeff Lorberbaum, chairman and CEO of Mohawk Industries. “We are proud of your success and what to help you grow. Our commitment to you is that Mohawk will be your best partner in increasing your sales and your profits.”
Lorberbaum offered some insight into the economy aimed at helping retailers keep a positive outlook and increased sales momentum.
“Sixty percent of flooring sales are going into remodeling,” he said. “We have to encourage consumers to invest in home, with aspirational products with unique features and benefits.”
He pointed out that the U.S. gross domestic product has been growing at 3% for multiple quarters, and this historic economic growth is fueled by a very strong consumer sentiment. October showed 250,000 new jobs created, and there's so much demand for labor that people are re-entering the workforce who haven't been working for a while. Not only are they working, but they are also earning higher wages. The tax breaks that were put into effect giving consumers another $1,000 to $1,500 in their pockets to spend.
“Don't be distracted by all the political noise,” he said. “Yes, we have challenges in America. We have a lot of work to do, but that's said, there are really a lot good things happening in our country and we're currently enjoying are really long upcycle—one of the longest in history.”
He noted while midterm elections have created a divided government, we will have to watch and see what will happen next year.
“We're also seeing the first round of tariffs on Chinese goods,” he said. “Since the tariffs went into effect, one in every five new jobs created in this country are manufacturing jobs, which the last administration thought was dead.”
He said while the U.S. has in recent years been concentrating on a service economy, which has left fewer dollars in American’s pockets, this administration's shift to manufacturing may once again help to build a thriving middle class, as manufacturing jobs have in the past.
“I still expect the industry to grow in the low single digits,” Lorberbaum said. “Differed purchases represent a huge opportunity for remodeling.”
Overall, the U.S. real estate market is healthy, although the recent hikes by the Federal Reserve and rising home prices are giving consumers pause. Although he reminded dealers that the current 5% average interest rates of 30-year home mortgages are still far below the historical average over the past 20 to 30 years.
“At Mohawk we have been investing at a record pace,” Lorberbaum said. “Many of you are investing as well, opening new showrooms, hiring more people, or opening new locations. All of these investments are helping the economy, and supporting increased consumer spending.”
For more information, visit mohawkind.com.