Carpet & area rug market report: Carpet still a dominant force but competitive pressures abound

Apart from the growing popularity of laminate, hardwood and other non-carpet options, the universe of carpet sellers is expanding. Most noticeably has been the influence of big box retailers. While there has also been a groundswell of Internet options for buying carpet, they typically do not come from brick and mortar retailers. Those participating in the survey mostly use the Web as a means to draw shoppers to their store. Overall, while it is clear that there have never been more carpet and rug options available, retailers say the biggest issue in the carpet business is eroding profit margins. More than 65% of the respondents said falling margins were impacting their business.

The study also confirms the scarcity of carpet-only stores. Less than 3% of the respondents said their inventory is exclusively carpet. About 42% said the percentage of floor space devoted to carpet was somewhere between 26-50% while a little more than 25% said it was between 51-75% and 17% said it was between 76-99%. Area rugs, which require much less merchandising space, seldom claim more than 10% of a retailer's floor space. A sizeable majority- 64% -said area rugs occupy 1-5% of their floor space.