Carpet & Rug Study Fewer rings (but higher price tags)

The typical floor covering retailer is selling less carpet, but is bringing in more money on each transaction. In our new survey, dealers said they average about 60 carpet transactions a month. While the figure is a decline from two years ago when the average was 69, during the same time frame the price per carpet transaction climbed from $2,400 to $3,509. Meanwhile, the number of retailers who reported annual carpet sales in excess of $1 million rose from 28% of those in the survey two years ago to 37% today 

Our exclusive survey reflects a changing market for carpet and area rug that seems to be placing more of a premium on high end products. Also, at a time when residential demand is soft, dealers are increasingly capturing more and more high end business.

While the category is still the most dominant in flooring, it is being influenced by a myriad of factors-not the least of which involves the growing popularity of hard surface options. Overall retailers participating in our survey indicate that carpet’s loss is hardwood’s gain. Forty-four percent of those surveyed say carpet sales are moving to hardwood, followed by 23% who said it was laminate and 14% who indicate carpet sales are being replaced by tile and stone. 

The slow down in residential sales has led to an increase in commercial business. Two years ago commercial accounted for slightly more than one-fourth of the business. This year it represents one-third of the business. The shift to commercial business is a welcome development: The price-per-sale is about double that of a residential transaction. Retailers told us they generate revenue of $4,825 on a commercial job versus  $2,405 for a typical residential transaction. 

As for expectations: while a clear majority of survey participants say sales next year will be as good or better than this year, the percentage of retailers anticipating a dip in sales has increased. Two years ago 10% of those polled predicted that commercial sales would be down in the year ahead. In the new survey, 18% expect a decline in the upcoming year. On the residential side, 17% of those surveyed two years ago said they anticipated a decline, this year nearly twice as many say they anticipate a dip in the coming months.

In the much smaller area rug segment, retailers said they sell an average of 15 rugs a month (up from 12 in 2006) for an average price of $553 each (down from $596 in 2006). The popularity of product priced over $1,000 appears to be slipping; it now accounts for 12% compared to 18% of the business from two years ago. Meanwhile rugs in the $500-$999 range account for 33% (an increase from 23% one year ago) of area rug sales.

In terms of retail space devoted to the area rug category,  a clear majority of retailers said they devote between 5% and 10% of their show room to area rugs. When asked about sales over the past 12 months, 84% of dealers said sales are flat, while 6% said sales are down from the previous year, and 10% said sales are up.  

NOTE: This is a snapshot of a new comprehensive study examining the retail market for carpet and area rugs. The conclusions are based on the opinions, preferences and purchasing behavior of U.S. flooring retailers/ dealers and have been compiled from an in-depth study conducted by Clear Seas Research, a division of BNP Media.

The study targeted 5,654 U.S. flooring retailers/dealers who are also active, qualified subscribers of National Floor Trends (NFT) magazine. A total of 210 survey questionnaires were completed by retailer respondents and compiled  for the results of this study.

For more information on obtaining the complete report or more detailed information on any specific aspect of it contact Sarah Turner  Turners@bnpmedia.com