The ceramic and stone tile segment of the floor covering product mix is expected to grow by over 17 percent in the next 18 months (see chart 1), according to floor covering retailers/contractors responding to a just-completed study conducted by National Floor Trends magazine in partnership with the market research department of Business News Publishing Co.



Gitana porcelain tile from Impronta Italgraniti.
The ceramic and stone tile segment of the floor covering product mix is expected to grow by over 17 percent in the next 18 months (see chart 1), according to floor covering retailers/contractors responding to a just-completed study conducted by National Floor Trends magazine in partnership with the market research department of Business News Publishing Co.

The survey, which received a 14 percent response rate, was sent to a representative cross-section of 2,000 active, qualified floor covering dealers/contractors selected on an Nth name basis from the domestic circulation of NFT subscribers.

According to the study, issues currently impacting the ceramic/stone business are topped by (multiple responses allowed): increasing numbers of Big Box channels, 61 percent; increasing competition from other flooring channels, 47 percent; eroding profit margins, 38 percent; other flooring types, 35 percent; consolidation among retailers and manufacturers, 31 percent; and consumer brand switching, 11 percent. The Big Boxes are viewed by the majority of respondents as neutral in affecting business, but are viewed as very negative by more respondents than very positive, presently and in 18 months.

Daltile was named the top-selling brand of ceramic tile in this year's study with 22 percent mention, followed by Florida Tile at 13 percent and American Olean at 10 percent. Characteristics cited most often for naming Daltile were selection, availability, price and display system.

Other important survey findings include: 68 percent of floor covering retailers/contractors sell ceramic/stone products. Look for this percentage to continue to increase in the coming years. Is your store selling ceramic and stone? Compare your store's sales figures to the ones following and see how your operation matches up.

On average, 37 ceramic/stone sales are generated each month (see chart 2). Twenty percent of those surveyed tallied 50 or more ceramic/stone sales each month. These average figures compare to 2003 study results in other product categories: vinyl, 19 sales; carpet, 62 sales; and laminates, seven sales. The sources for ceramic tile include ceramic tile distributors, 80 percent; flooring distributors, 63 percent; and direct from manufacturers, 41 percent (multiple responses allowed).

Diago's Tex-Tile procelain with tweed look.
Installation is definitely a concern: 48 percent of respondents report needing more installers; 47 percent having enough qualified installers; and 23 percent reportedly need a quality training program (multiple responses allowed.).

Nearly one-third (31 percent) of respondents have ceramic/stone sales of $200,000 or more. The mean is $236,681 annually.

The ticket amount among all survey respondents per average ceramic sale is $3,475. Three-in-ten (30 percent) of these retailers noted an average ticket amount of ceramic sales in the $1,000 to $2,999 category.

Fewer retailers are currently involved in stone compared to ceramic. The average ticket amount per sale of stone is $3,007. Thirty-four percent of those involved in stone report an average stone sale of $3,000 or more.

Imports continue to control the market but the difference is slimming to just a 57 to 43 percent margin. In last year's study, imports had a 63 to 37 percent advantage. Retailers/contractors recommend ceramic/stone to customers as follows: always, 34 percent; often, 47 percent; and sometimes, 18 percent. Only 1 percent never mentioned ceramic/stone during a customers' visit to the floor covering store. And, the response from the consumer continues to be very positive, 32 percent; somewhat positive, 54 percent; neutral, 13 percent; and somewhat negative, 1 percent. Consumers also gave high marks to ceramic tile's durability, quality, selection/styling and price. Only in the maintenance category was ceramic tile tagged with a low rating.

Over two-thirds (68 percent) of retailers/contractors expect their tile sales to increase, while 31 percent expect tile sales to stay about the same for the next 18 months. Of those expecting an increase, 37 percent project a 6 to10 percent increase in the segment.

Consumption of ceramic and stone tile breaks down as follows: floor tile, 70 percent; wall tile, 15 percent; countertops & backsplashes, 8 percent; trims & decorative tile, 5 percent; and exterior, 2 percent. This will be a definite growth area for the floor covering retailer/contractor as most tile manufacturers produce complementary products for floor, wall and countertop applications.

The 12-by-12-inch floor tile continues to the be the most demanded tile size with 56 percent mention by respondents (see chart 3); followed by 13-by-13 inch, 22 percent; 18-by-18 inch, 9 percent; and 16-by-16 inch, 5 percent. For wall tile, the 6-by-6-inch format controls the market with a 27 percent share, followed by 4-by-4 inch at 23 percent, 8-by-10 inch at 17 percent, 12-inch square at 10 percent, and 41/4-by-41/4 inch at 9 percent.

Over the next 18 months, our retailer/contractor respondents expect to sell larger-sized tiles (see chart 4). The 16-by-16- (up 9 percent) and 18-by-18-inch (up 7 percent) formats should receive more interest at retail, according to those surveyed. The 12-inch-square size is projected to drop to a 39 percent share (a loss of 17 percent) while the 8-by-8 inch dropped to 18 percent (a loss of 4 percent), compared to last year.

Respondents report porcelain tile sales of 38 percent (mean) with 50 percent projecting increases in the segment and 50 percent indicate it will stay the same within the next 18 months. The increase is expected to be 16 percent on average (see chart 5).

Product design and styling, product quality, distributor service/support and price are the four top attributes, ranked in order of importance, affecting the retailer's decision to sell/promote a particular brand of ceramic tile.

In the next two years, according to our retailer/contractor respondents, the segment's biggest challenges are as follows: ceramic tile manufacturers will have to overcome alternative hard-surface flooring, product innovation, installation services and consumer demands.

These are just some of the findings in NFT's 2003 Ceramic/Stone Tile Market Trends Study.

Gardenia Orchidea's Opera Scala Lucido white-body tile.
Editor's Note: National Floor Trends commissioned another in our ongoing series of market studies to help flooring retailers/contractors enhance the success and profitability of their businesses. Identifying current product/sales trends and projecting the industry's future direction is imperative to making strategic decisions that ensure growth and prosperity.

Among the topics covered are: ceramic/stone sales generated each month; annual ceramic/stone sales; average ticket amount of ceramic/stone sales; types of ceramic tile sold; expected change in ceramic tile sales within 18 months; ceramic floor tile most frequently sold; ceramic wall tile most frequently sold; ceramic tile size expected to sell most within next 18 months; porcelain tile percentages; changes in porcelain tile sales within 18 months; domestic vs. imported ceramic tile sales; floor space devoted to ceramic/stone products; ceramic/stone residential and commercial percentages; frequency of recommending ceramic/stone; consumer response to ceramic/stone products; perception of ceramic tile characteristics; top-selling ceramic tile brand; ceramic tile brand attributes; issues impacting ceramic/stone business; challenges ceramic tile manufacturers need to overcome; effect of Big Box home centers; ceramic tile sales training; ceramic tile installation needs; and sources of ceramic tile.

The complete 2003 Ceramic/Stone Tile Market Trends Study is available for $225 each or $195 for multiple copies.