By far the strongest category in hard surface flooring, hardwood is poised for continued growth this year and beyond. Our exclusive retailer survey indicates there are challenges related to competition, pricing and the many manufacturers vying for attention. And, despite the addition of new species, oak remains the overwhelming favorite among consumers.



Wood flooring continues to tower high above the hard surface landscape and is expected to continue its steady climb over the next year and beyond. Still, National Floor Trends' market study on hardwood flooring indicates that there is uncertainty sprouting around this venerable category.

Pricing, on-time delivery and the influence of big-box retailers top the list of issues being pondered by specialty retailers involved in the hardwood flooring business. Another looming question: Will this extremely fragmented product area see greater consolidation? While it may be dominated by a small universe of major players, there are dozens of companies in the fray. When asked to name their top selling brand of wood flooring, respondents in the survey collectively identified 47 separate vendors. Asked what brand they would carry if they could carry only one, they collectively assembled a laundry list of 57 different labels including private label.

According to the survey, the two leaders in the category are Armstrong's Bruce line, which was identified by just over 19% of the respondents as their top selling brand, and Mirage, which was named by about 11%. Rounding out the top five were Mohawk (8%), Mannington (7%) and Anderson (6%).

The market study found that wood flooring accounts for a little more than 20% of total sales volume, positioning the category as the dominate area of hard surface. It is also well above the second most popular hard surface segment, ceramic tile which accounts for about 14% of the volume. Wood nevertheless, still lags well behind carpet, which accounts for nearly 40% of sales among those in the survey.

While retailers may have differing opinions about which brand to carry, the survey did offer consensus on a number of other hardwood flooring issues:

• About two-thirds of all wood flooring transactions are valued at more than $2,500, with about 10% under $1,200.
• Nail down (or staple) installation accounts for more than half the business while glueless (floating) products account for 25% and products installed with adhesive generate 22% of the business.
• The three most popular plank widths-narrower than 2.5," 2.5 to 3" and 3.01 to 4"-- are equally popular. Each accounts for just under 30% of sales.
• Although other species are steadily making inroads, oak remains solid. It was named as the No. 1 seller by 65% of those participating. The second most popular specie was red oak, which was named as the top seller by just under nine percent of retailers.
• Most retailers (60%) devote somewhere between 10 and 29% of the floor space to wood flooring. The remaining 40% is even split between more and less space.
• Domestic product performs slightly better than imported. Quality issues involve imported product about 52% of the time, respondents said.
• Outsourcing installation jobs to independent contractors is standard practice for 54% of retailers. About 27% have their own in-house crews handle the work and about 19% said they alternate between using their own people and turning to outside help.
• Regardless of who installs the floor, nearly nine out of 10 retailers say they specify all products to be used.

Although the survey did reveal some uneasiness about the future direction of the category, 61% of respondents said they expect residential sales this year to outperform 2005. About one-third said sales will be flat and less than 5% predict a dip in sales.

Forecasts for the commercial segment and the hardwood refinishing business are not as encouraging. Only 17% of respondents anticipate an uptick in commercial sales, while 76% said they will stay the same and 7% said sales would slip. Meanwhile, slightly less than half of those surveyed expect the refinishing business to grow while 44% said it will stay status quo and 7% said it will most likely soften.

Participants were also surveyed about the factors they consider when selecting a manufacturer. Simply put, retailers place a high premium on bread and butter issues like scheduling, pricing and the availability of reps. When asked to rate the importance of various services and attributes offered by manufacturers, on-time delivery and competitive pricing were the clear favorites. Far less significant are frills like co-op advertising, sales incentives and other promotions.

When offered a list of issues that may affect their business, the most pressing concerns relate to the competitive environment: The growing number of big box stores, increased competition from other flooring channels and eroding profit margins were the areas most frequently identified.

Even so, it seems that demand for wood flooring is strong enough to offset supply chain woes. Survey participants were asked: "Has the recent shortage of lumber and subsequent increases in price affected your volume and profitability?" Slightly more than 75% said it had not.