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Breaking Flooring News

NAFCD, NWFA release industry white paper and educational tools

January 7, 2002
A new 14-page floor covering industry white paper, released today by the National Floor Covering Distributors (NAFCD), National Wood Flooring Association (NWFA), and Indian River Consulting Group, sheds new light on how U.S. flooring distributors have responded to structural change in the flooring industry during the 1990s and debunks some of the dour developments industry observers had predicted for this industry segment over the decade.

"Floor Covering Industry Observations: Past, Present and Future Perspectives," an overview of the problems and challenges facing the industry, represents the first formal secondary analysis of all existing industry studies that have been undertaken over the past 10 years, Indian River Consulting's Michael Marks said during a Jan. 7 press conference.

"We found that a lot of the (gloomy) predictions made about distribution were wrong," he explained. "In fact, the role of the wholesaler has increased in importance.

"The future for the wholesaler, if he's well managed, is very bright," Marks added.

Topping the list of surprise findings in the report was the fact that, contrary to earlier projections, the number of U.S.flooring wholesalers has increased since 1992. However, most of the business is now more concentrated among a relatively small number of distribution firms.

Among other things, the report also looked at the impact of big-box merchandisers and consolidation among manufacturers, as well as the market's effect on distributor margins. In addition, the white paper projected a 13% increase in distributor sales over the next five years tempered by a 3% - 5% decrease in market share. It further projected a stable environment for big and efficient distributors as well as smaller players with less than $25 million in annual sales. The report predicted that distributorships occupying the middle ground between the large and small categories would struggle over the period.

A second aspect of the NAFCD/NWFA initiative consists of an educational package - consisting of Road Map, Self Diagnostics and Tool Kit components - that will be made available to the membership of both groups. The associations will begin promoting the kit to its members throughout the year.

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