Market Study: Laminate Flooring Market sees Dips and Turns
by Al Stewart
August 12, 2008
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| Berry
Floor's Oxford Oak |
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While
enthusiasm for the category stays strong and manufacturers continue to earn
high marks for innovation, our exclusive survey of 379 retailers finds that
stores are not selling nearly as much laminate as a few years ago.
Laminate
flooring may be easy to install, but as a piece of the floor covering puzzle it
is hard to pin down. While the products in the category have seen steady
advances in performance and design, specialty retailers are reporting a sharp
drop in annual dollar volume from laminate sales. Four years ago, those
participating in our survey said they averaged more than $327,000 in sales for
the category. Those responding to this year’s survey said the average was
$100,411. The falloff is widely seen as a byproduct of laminate sales shifting
to big box stores.
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| Tarkett's
Trek Laminate |
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At the same time, it is clear
there are also specialty retailers who are seeing a surge in demand. The
percentage of survey participants who said they average more than 20 laminate
transactions each month increased over the past year from 8% of those polled to
14%. Similarly, the percentage of
retailers who say they average anywhere from 11 to 20 laminate transactions a
month increased from 9% last year to 14%.
Indeed, the Laminate Flooring Market Study conducted
exclusively for NFT reveals a highly established product
segment that appears to be in a state of flux. Perhaps most notably, the
average retail price for a laminate transaction has been on a rollercoaster in
recent years. In 2004, retailers told us their average ticket was $1,439. By
2006 the figure had climbed to $1,755, only to drop down to $1,555 the
following year. Now retailers say the average is $1,621. Meanwhile, on a square
foot basis, the average price rose slightly over the past year from $4.16 to
$4.22 today. Also up is the size of the average job: from 379 sq. ft. in 2007
to 427 sq. ft. this year.
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| A
selection from Quick-Step's Elegance line, Wenge. |
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The issue of eroding profit margins
is not as prevalent in the new survey as in previous studies. Two years ago,
half of those polled described declining margins as a “significant issue” for
the category. While it is still a concern, the percentage of respondents that
specifically cited it fell to 41% this year. As has been the case for the past
four years, the No. 1 issue for specialty stores selling laminate is the
growing number of big box retailers. It was cited by 66%, compared with 54% in
2004.
What is clear is that retailers remain enthusiastic about the
category and have in recent years become even more inclined to recommend it. In
our study four years ago, about 60% of those polled said they frequently (or
always) suggested laminate to consumers in their showroom. Today, the
percentage stands at 77%. One reason dealers may be inclined to pitch the
category is their ability to influence a purchase decision. Even in those
instances when a shopper has a specific brand in mind, nearly half of the
respondents said they usually can steer them to another brand.
The
strides in engineering have also resulted in a category that is almost entirely
glueless (93% according to the survey) and trouble free. More than 80% of those
polled said they hear complaints “seldom or never.” Asked to list the concerns
consumers express about laminate, dealers said the top two areas mentioned
involve noise or sound followed closely by maintenance issues including how to
keep it clean. One area that is clearly a strong suit is installation. Only 3%
of those who responded indicated that consumers find installation an issue.
When retailers were asked in 2005 to identify the top issues shaping the
laminate business in the coming years, 22% identified installation. This year
the percentage was 14%. Then as now, the top concern expressed by those
participating in the survey is “product innovation.”
How Retailers Pick Their Brands
The quality and design of
laminate products is still far more important than incentive plans, technical
support or even consumer preference, retailers told us.
Asked the top three factors they consider when choosing the
line up of suppliers vying for their laminate business, 61% cited product
reliability and quality, 50% identified product design and styling and 47% said
ease of installation/maintenance.
Meanwhile such factors as tech support, sales training and incentive
programs were named by fewer than 10%.
Although Quick-Step remains the
company most frequently mentioned when retailers are asked to identify their
top selling laminate brand, there are indications that competition for the top
spot is heating up. The percentage of retailers who identified Quick-Step as
their top seller this year was 21%, a dip from last’s 27% figure. Mannington,
meanwhile, posted the biggest gain. The company was named by 14% of the
dealers, up from 8% one year ago. The company finishing third in the top-seller
ranking is Wilsonart. It was named No. 1 by 11% of those polled (down from 18%)
one year ago. Rounding out the remainder of the top 10 (and the percentage of
dealers who named them No.1) are: Shaw (11%), Armstrong (8%), Mohawk (7%),
Alloc (6%), Pergo (5%), Tarkett (3%), and Berry (2%).
This is a snapshot of an in-depth
research study examining the retail market for laminate flooring. The
conclusions are based on the opinions, preferences and purchasing behavior of
379 U.S. flooring retailers/contractors who are also active, qualified
subscribers of National Floor Trends
(NFT) magazine. The study was conducted between April 30 and
June 2, 2008.
The full report includes up-to-date information on key issues
and market trends shaping the laminate business. It covers a four-year period,
starting in 2004. The full report is now available from Clear Seas Research.
For information about ordering or to learn more about Clear Seas Research,
contact Sarah Turner at turners@clearseasresearch.com
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