NFT's Carpet & Rug Retail Survey: Soft surface stays firm
October 16, 2007
For all the changes seen in the flooring business of late, nothing has altered the importance of carpet. How important? The product occupies at least half the merchandising space at a typical floor covering store. One of every four dealers say they devote at least 75% of their showroom to the category. While the totals are influenced by the inclusion of carpet-only stores, the survey of retailers makes clear carpet’s towering presence in the flooring business.
Aside from the continuing popularity of soft surface flooring, dealers also told us about additional benefits that come from carpet. For one, it is an area likely to generate a healthy stream of ancillary revenue. Those polled said nearly 70 of their carpet sales include a separate cushion product. And then there is the potential for sales beyond the resident market. While products installed in the home remain dominant, retailers report that a sizeable portion of their carpet sales-almost 30%-comes from the commercial side.
Overall, NFT ’s market trends study on carpet and area rugs reflects a mature category that defies a number of trends seen in other areas of flooring. Perhaps, most notably the carpet business is still overwhelmingly skewed toward two major manufacturers-Mohawk and Shaw Industries. More than 80% of those polled identified one of those two brands as their No. 1 residential seller with the answers almost evenly divided between them. All told, more than 20 brands were collectively identified by participants as a top seller. Beaulieu, named by slightly more than 8% of retailers, was No. 3 on the list.
The wide range of pricing options seen in the residential carpet category was reflected in the retail survey. Just under 34% of those polled said the average sale was under $1,500 while about 16% said it fell between $1,500 and $1,999. Equally well represented was the higher end: just under 30% said the average price was in the $2,000 to $2,900 range while more than 21% their average carpet transaction was in excess of $3,000. The average ring on a commercial carpet sale, meanwhile, was much higher. Almost two-thirds of the transactions are in excess of $2,000 while one of five exceeds $5,000.
In the much smaller product category of area rugs, about 31% of sales were under $300 while slightly more that half (53%) were in the $300-$999 range. About 17% said it exceeded $1,000. Not surprisingly, area rugs are also confined to a much smaller area of the store. Nearly 82% of respondents said they devoted less that 10% of their selling space to area rugs. One of every five stores said less than 2% of the space was occupied by area rugs.
Asked about the future of the carpet category, dealers and contractors participating in the survey could be described as cautiously optimistic. Although a sizeable portion of those polled-37%- say they expect residential carpet sales to increase in 2008, nearly 40% anticipate that sales will be flat, while about 24% said they will be off. There appears to be slightly more enthusiasm for commercial sales. Just over 40% forecast an increase while 10% said sales will dip.
Other key findings in NFT’s carpet and area rug survey were these:
• Retailers still like the yellow pages. Asked where they spend their ad money, it was the most popular answer followed closely by newspaper ads. Online and internet ads were the least popular answer.
• The vast majority of retailers-nearly 90%-said they raised prices to reflect increased wholesale costs in carpet.
• A solid majority of dealers said they purchase carpet from at least five or more suppliers including 11% who said they carry at least 11 brands.
• In area rugs, dealers collectively named 33 brands as a No. 1 seller but Shaw was by far and away the most popular answer with nearly 40% of the responses.
• Uncertainly about the future of the economy was evident when retailers were asked to explain their expectations for the future of carpet. The top reason cited by those predicting an increase was “Better economy.” Among the top reasons given by those less optimistic were a soft real estate market, a dip in construction and “bad economy.”