Focus 100 Retail - November 2012

By Darius Helm

 

It’s taken six years, but it looks like the housing market has finally stabilized, and all signs suggest that the market is entering, albeit sluggishly, into a growth mode. Nearly all the retailers and contractors on the Top 100 list are reporting that they anticipate growth this year, and it looks like the average growth will be about 5% or 6%. Because many of those on the list are market leaders, it’s likely that total growth in the residential flooring market will be somewhat lower.

Competition is still extremely fierce. After all, consumers have less disposable income than in recent years, and flooring is a postponable item. Furthermore, the average square footage per capita has gone down in the last six years. Diversification has been an effective strategy for many retailers, both in terms of products—window treatments, countertops—and markets like mainstreet commercial and even bid.

The overall trajectory of sales this year was guided by the overall weather trend, much like it was last year. For most of the nation, it was an unnaturally warm winter. In fact, it was the fourth warmest winter on record, according to data compiled since the 1890s, and the warmest since the turn of the century—only the Southwest and lower Rocky Mountain states and the Pacific Northwest (nine states in all) experienced normal winters.

The warm, dry weather allowed for a greater number of builder and remodeling projects than normal, so the first few months of the year were strong. By springtime, which generally experiences a surge of flooring activity, much of the demand had been released and those months were slower than normal. For many retailers, demand didn’t start to build again until well into the summer months, and by most accounts that activity has continued into the fall, albeit somewhat tempered by the uncertainty and fear-mongering brought about by election year politics.

Most of the relevant economic indicators are now pointing in the right direction. Consumer confidence is the highest it’s been in nearly five years, and the stock market is back up to where it was in 2007 before the financial crisis. Unemployment is down to 7.8% compared to 9.1% this time last year and 9.6% in October 2010. 

It’s worth noting that these statistics actually paint a rosier picture than the reality on the ground. Economic growth in the U.S. is still fairly anemic at 2%, and on top of that the global picture remains fragile, with many of the world’s leading economies still flirting with disaster. And while U.S. unemployment numbers may be falling, many of those who are finally getting jobs are trading down. At the same time, energy costs remain high and are poised to continue their inexorable rise, and next year promises to bring significant increases in food prices, as we start to feel the impact of this year’s widespread drought.

There are big disparities between the states when it comes to unemployment rates. At one end is North Dakota with a 3% unemployment rate (thanks to the oil boom in the Bakken), with Nebraska and South Dakota close behind (3.9% and 4.4%, respectively). At the other end is Nevada at 11.8%, Rhode Island at 10.5%, California at 10.2%, New Jersey at 9.8% and North Carolina at 9.6%.

In terms of the monthly drop in unemployment rates from August to September, it was good news for California, which along with South Carolina and Utah posted the biggest drops (0.4%, 0.5% and 0.4%, respectively). States with 0.3% drops included Nevada, Hawaii, Idaho, Kansas, Illinois, Missouri, Louisiana and Iowa. The states that posted no drop in unemployment—Maine, Virginia, New Hampshire and North Dakota—all have lower unemployment numbers than the national average.

For the complete story of the Top 100 Retailers, see the November 2012 issue of Floor Focus Magazine.


Copyright 2012 Floor Focus 



Other Archived Articles

Haines Vice President of Operations Dies   Full Article
Glen Burnie, MD, April 1, 2014 -- Distributor Haines said its vice president of operations, Mark Blakely, died March 27 from health complications.

Manufacturing Keeps Expanding in March   Full Article
Washington, DC, April 1, 2014 -- U.S. manufacturing continued to expand in March at a higher pace than in February, according to the Institute for Supply Management.

Construction Spending Edges Up in February   Full Article
Washington, DC, April 1, 2014 -- Construction spending ticked up in February, according to the Commerce Department.

Perfect Timing for New Chocolate Flooring   Full Article
Vancouver, BC, April 1, 2014 -- For a limited time, BuildDirect is offering real chocolate plank flooring.

Del Conca Opens U.S. Manufacturing Facility   Full Article
Loudon, TN, April 1, 2014 -- Del Conca USA held a ribbon-cutting ceremony for its new manufacturing facility in Loudon.

Vinyl Institute Names Vice President of Marketing   Full Article
Alexandria, VA, April 1, 2014 -– The Vinyl Institute has named Susan Wade vice president of marketing and communications.

Tandus Centiva Offering Green Innovation Grant   Full Article
Dalton, GA, March 31, 2014 -- Tandus Centiva said it will award $3,000 in Green Innovation grant funds to a K-12 school.

SelecTech Signs Agreement with Spartan   Full Article
Avon, MA, March 31, 2014 -- SelecTech, a manufacturer of flooring products from recycled materials, has signed an agreement with Spartan Surfaces to represent Selectech in the Midwest.

Chicago Manufacturing Expands at Slower Pace   Full Article
Chicago, IL, March 31, 2014 -- Manufacturing activity in the Chicago area grew at a slower rate in March.

Fuse Alliance Adds Four New Members   Full Article
Aurora, CO, March 31, 2014 -- Fuse Alliance said it has added four new commercial flooring contractors and 20 new locations to the network.

J+J Sponsoring Education Facilities Workshop   Full Article
Dalton, GA, March 31, 2014 -- J+J Flooring Group has recently joined with APPA, the world-wide professional association of education facility managers, to present an APPA Facilities Drive-In workshop.

Consumer Spending, Incomes Rise in February   Full Article
Washington, DC, March 28, 2014 -- Consumer spending rose 0.3% in February after a 0.2% rise in January, the Commerce Department said.

Tuftex Wins California Recycled Water Award   Full Article
Santa Fe Springs, CA, March 28, 2014 -- Shaw's Tuftex division received the Recycled Water Customer of the Year Award from the WateReuse Association's California Section.

NWFA Expands Scholarship Program   Full Article
St. Louis, MO, March 28, 2014 -- The National Wood Flooring Association said it will significantly expand its scholarship program under its new Education & Research Foundation.

Consumer Sentiment Falls in March   Full Article
Ann Arbor, MI, March 28, 2014 -- Consumer sentiment declined to a final March reading of 80 from 81.6 in February, according to the University of Michigan and Thomson Reuters survey.

Tarkett in Partnerships with Healthcare Groups   Full Article
Chagrin Falls, OH, March 28, 2014 -- Tarkett said it has formed collaborative partnerships with four leading healthcare organizations: NXT Health, Planetree, Practice Greenhealth, and The Center for Health Design.

Wood Flooring Sales Decline in Europe   Full Article
Brussels, Belgium, March 28, 2014 -- After a year in which overall European wood flooring consumption fell by 5.9%, first estimates suggest the market contracted another 5% in 2013, the Lesprom Network said.

UK's Carpetright Issues Profit Warning   Full Article
London, England, March 28, 2014 -- Carpetright has issued its third profits warning in six months.

Armstrong Products Featured in 'Dream Builders'   Full Article
Lancaster, PA, March 27, 2014 -- Armstrong and Bruce flooring will be featured in the premier season of NBC’s new reality competition series, “American Dream Builders,” hosted by designer Nate Berkus.

Pending Home Sales Fall in February   Full Article
Washington, DC, March 27, 2014 -- Pending home sales fell 0.8% in February to the lowest level in more than two years, the National Association of Realtors reported Thursday.