Despite challenges, dealers going strong
By Ken Ryan Despite a host of potential hurdles—inflationary pressures, the Delta variant, ongoing supply chain delays and a lack of installers—floor retailers continue to report strong business activity for the most part through early August. With nearly two-thirds of the calendar year on the books, the flooring retail segment remains on pace to match or potentially outperform 2020, which was a great year despite or because of COVID-19.
“We are consistently fully booked eight weeks into installation as business remains strong,” said Eric Mondragon, hard floor buyer for Salt Lake City-based RC Willey, which has 15 locations in four western states. “Since there is still a shortage of floor installers, we are running at maximum capacity, but most consumers are waiting well because they have come to realize that there is a waiting list to hire someone for any home improvement project.”
Several retailers said July was a record month for business. That list included John Taylor, president of Taylor Carpet One Floor & Home, Fort Myers, Fla. “Business has remained very strong all summer,” he told FCNews. “We had a record in July and although traffic decreased compared to a few months ago, it was still stronger than most summers. The real estate market remains strong and therefore offers us many opportunities for home improvement. We’re getting jobs of all shapes and sizes, but we’re still seeing a fair amount of bigger jobs.”
Year-over-year, Ted Gregerson’s Abbey Carpet & Floor and Floors To Go in Anniston, Ala., are up 7% from 2020, which was an excellent year for business. While retail traffic has slowed to some extent in the past 60 days, Gregerson cited summer vacations as the reason rather than a slowdown in business.
The still robust activity comes despite price hikes at gas pumps, supermarkets and car dealerships making consumers more involved with their throwaway money, retailers said. In fact, the Labor Department reported that the consumer price index rose 5.4% in July from a year earlier, representing the largest jump since August 2008.
Steve Weisberg, president of Crest Flooring, Allentown, Pennsylvania, said he’s noticed a slowdown since mid-July. “That could be due to a number of factors – the nature of the time of year with holidays, etc. that take precedence,” he explained. “While we’ve been lucky enough to be so busy while spending less on advertising, I’m planning to run a financial promotion from October to mid-November to help boost business.”
RC Willey’s Mondragon said he expects the third quarter to be 30% higher than the same period last year. How the fourth quarter goes, he said, will depend in part on Labor Day sales and private sales (formerly known as a Stainmaster sale). “Our question: ‘Did we take the Christmas sale off the market at the beginning of this year?’ will be answered; or are there still consumers who want to finish projects before the holidays? Will families try to get back to some normal family gatherings this holiday season? Time will tell.”
For now, retailers are finishing a strong third quarter, although back orders remain an obstacle. “Some customers understand the [delayed back orders]; some don’t,” says Penny Carnino, COO, Grigsby’s Carpet, Tile & Hardwood, Tulsa, Oklahoma. “Most people wait anyway. We do a lot of commercial and residential business, and both are still alive and strong, including the construction part of our business. Based on what we’re still doing, I think the fall will continue to be strong. We are currently up 15% and hope for a strong end to the year.”
With the wood shortage becoming less of an issue, the home improvement sector is still moving at a rapid pace. So says Matt Wien, manager of Marshall Carpet One & Rug Gallery, Mayfield Heights, Ohio. “Business is still as strong as it ever was,” he said. “We expect a very strong drop heading into the holiday season.”
While most retailers agree that business has remained strong, many dealers recognize that there are signs that the pace of retail activity is slowing and the commercial side is becoming more aware of costs. Mike Foulk, owner of Foulk’s Flooring America, Meadville, Pennsylvania, is one of those involved. “As an industry, we need to propagate optimism rather than [talking about] the shipping costs, price increases and shortages of materials as people start to listen and withdraw,” he said. “Our installers are busy and will remain busy to catch up. Cash and carry is declining. Sales on future work become more competitive as people look more closely at costs.”