Contract Dealer Survey 2025: This year’s respondents express concerns about the impact of inflation on the health of their business – Dec 2025

By Darius Helm

This year, hundreds of commercial flooring contractors from across the country responded to Floor Focus’ annual survey to weigh in on business issues, product trends and favorite flooring producers and to make their voices heard when it comes to working with partners in the built environment and how the various relationships can be improved to yield better results. By and large, the surveyed contract dealers were heavily focused on issues of price, as well as on process efficiencies that impact the bottom line, as they struggle to keep their heads above water in the subpar market.

Tariff-driven price increases are top of mind for most of this year’s respondents, as they see their margins diminish. “We are affected the most by tariffs,” noted one contract dealer. “The volatility makes it hard to know your true costs.” Another wrote, “Tariffs scare me.” And yet another stated, “Costs are insane and the bubble will burst at some point.”

Mind you, not all of those surveyed were of the same mind. One dealer wrote, “Price increases due to tariffs are a must and are a good thing as long as it increases U.S. production and job opportunities.”

Some dealers look at price increases from manufacturers through a skeptical lens. “Mills have used the tariff issue as a profit driver,” claims one respondent. “Price increases were unnecessary and should have been tariff surcharges instead.” Another goes a step further, writing, “I get the feeling the mills raise pricing in soft markets so they can show growth/profit.” (For more on manufacturer price increases, see Year in Review, starting on page 39.)

Rising operating costs are another major concern, ranging from energy, insurance and freight costs. Referencing the state of the market, one contract dealer noted, “It creates a lot of challenges, primarily warehouse space because now we are forced to ship and receive materials for projects that are not ready for installation to avoid price increases.” Another dealer suggested the strategy of getting “materials ordered as soon as possible and work with the client to bill for stored materials.”

Many contract dealers were generous with advice. “Hold everything loosely,” one wrote. “Make sure you are diversified in your market to handle a slowdown in one segment,” another advised.

One dealer wrote a virtual essay in the comments section detailing critical steps to be taken to weather the volatile market. Here’s part of that comment: “Establishing preferred vendor agreements can help lock in pricing and secure material availability, while diversifying suppliers-especially sourcing more domestically-reduces vulnerability to global disruptions and tariffs. Internally, tighter scheduling and smarter inventory management will minimize cash tied up in materials and reduce job delays. Project estimates should include realistic lead times and escalation clauses to protect margins.”

When it comes to the market segments, while healthcare/acute care, which includes hospitals, medical office buildings and clinics, remains the fastest-growing segment, it received fewer votes than in the last couple of years, as did K-12, while multifamily new construction projects ticked up, along with senior living and tenant improvement. Hospitality slid a hair, while public space and retail business was up slightly. And corporate business was about flat.

ON THE BUSINESS

This year, only 54% of respondents report being part of a group, a step down from numbers in recent years-86% last year and 88% in 2023-and of those in groups, 57% are with Starnet and 31% are with Fuse (the two dominant flooring contractor groups), and the rest are mostly partnered with residential-focused groups like Carpet One, ProSource and CarpetsPlus Colortile. It’s likely that the push by some residential dealers into contract work in recent years-several retailers have established sizeable contract divisions-is reflected in the lower participation rate in contractor groups. And some have already joined Fuse and Starnet.

Annual revenues from 2025’s slate of respondents indicate more small operations and likely some operations that have seen revenues shrink. This year, 25% report revenues of less than $5 million, compared to only 3% last year and 10% in 2023. In fact, the last time we saw a number like that was in 2009, as the commercial market struggled to find its footing in the wake of the Great Recession.

Another 59% reported revenues from $5 million to $30 million, down from 77% last year and 72% in 2023. And only 16% reported revenues north of $30 million, down a few points from the last couple of surveys but up from 8% in 2021.

For some contract dealers, cleaning and maintenance services offer an additional revenue stream that can help buoy them in unsteady times, but it’s an investment in time and money that many are not willing to take on, despite encouragement from the commercial dealer groups. This year, 26% of respondents say they offer cleaning and maintenance, down from 36% last year but on par with 2023. On average, it makes up 6.8% of their revenues. That’s a fairly healthy boost to a business. Some contract dealers report that it makes up for 25% or more of total revenue.

Surveyed dealers this year have a sales staff of just over six people, down from 7.4 people over the last three surveys-this reflects more on the size of the operations than on any culling of associates.

One surprise this year is the level of salesforce involvement with architects and designers (A&D). Back in 2009, about 38% of dealers reported that over three quarters of their salesforce worked directly with A&D, and that number steadily dropped over the years, going down to just 11% last year. But this year, it has bounced back up to over 24% with that level of A&D involvement. The average across all surveyed firms is 41% of staff working closely with A&D.

ON THE PRODUCT

Carpet tile’s share of total flooring revenue has remained fairly steady over the last few years, at 27% this year, not far off its peak of 33% in 2011, while flex LVT has been growing by about a point a year, reflecting the continuing shift toward hard surface. Combined, carpet tile and flex LVT make up 45% of contract dealers’ flooring revenues. Rigid LVT, at 7% this year, is making some inroads, but it’s not suitable for a lot of high-traffic commercial environments, so its growth is, for now, constrained.

One category holding its own is broadloom, which until 2009 was the biggest piece of dealers’ flooring pie. It steadily lost share over the years, though it has recently shown signs of stabilizing. And this year it actually made some gains, accounting for 9% of revenues, up from 6% last year.

Sheet vinyl and VCT, which both made modest gains last year, are down this year. VCT in recent years has suffered share loss to LVT, although producers report that VCT is experiencing some growth from dissatisfied LVT customers. Sheet vinyl, meanwhile, has its most secure niche in medical settings-it’s still considered the best solution for sterile settings-so it’s unlikely to slide much more until better alternatives are developed and accepted into the market.

Ceramic tile makes up 13% of dealers’ revenues this year, showing little change over the last decade. It’s a go-to for waterproof installations like bathrooms, for many utilitarian, high-traffic installations and, with elevated designs, for front-of-house applications. Compared to the rest of the globe, ceramic tile has a fairly low share of flooring in the built environment, leaving it a greater opportunity for growth than many other flooring categories.

Contract dealers were also asked to report on their fastest-growing product categories, and for the second year in a row, ceramic has topped the list. This year, 50% of respondents cite ceramic as the fastest-growing category. And carpet tile moved ahead of flex LVT, which just two years ago was the hottest product, and by a good margin.

Overall, the categories showing growth this year are ceramic, carpet tile, flex LVT, rubber, sheet vinyl and rigid LVT. Hardwood is down a bit, while broadloom and VCT are down by much more. And niche categories like linoleum, laminate, cork and bamboo are all trending down, at least for now.

Over the last decade or so, the industry has seen a lot of gains by poured floors-mostly concrete but also resinous floors. And here and there, terrazzo is performing well. In terms of the biggest category, finished concrete, 79% report using subcontractors for the work and only 21% do it inhouse, reversing a slight trend in recent years.

Floor Focus asked those that do finished concrete work to estimate how much square footage they completed over the last year. Those doing a million or more square feet of concrete accounted for 4% of responses, with the bulk of dealers (44%) reporting doing between 100,000 square feet and a million square feet over the last year. Nearly 14% reported doing less than 10,000 square feet. And it seems that its use is continuing to grow, with 32% of respondents reporting that they’re doing more finished concrete applications and only 11% saying they’re doing less.

ON THE PROCESS

One of the biggest takeaways from this year’s survey is that dealers are hugely concerned about prices and operating costs, with 95% of respondents saying that installed costs are up and only 1% saying they’re down, numbers last seen briefly during the height of the pandemic. Similarly, 91% say pricing is up, and 2% say it’s down.

It looks like margins are taking a beating, as well, with 46% reporting a decrease compared to 17% saying margins have improved. Even during the pandemic, margins didn’t fall that far.

Meanwhile, other issues that are normally more pressing, like direct sales, have diminished in importance. Even environmental drivers have taken a back seat, with only 25% reporting an increase and 21% reporting a decrease.

When it comes to top problems, what’s most interesting is how timely delivery shot to the top of the list this year, well ahead of installation and other jobsite issues that usually are the biggest concern. Typically, about 3% to 6% of respondents cite it as a top problem, except in 2021 when the pandemic slowed all transport (it was at 39% in 2021). This time around, the issue is mostly about the volatile supply volumes leading to extra expenses, like warehousing.

One contract dealer cited “installation schedules that keep getting pushed. It makes our cash flow tighter, we work on projects for a much longer time, and then many of our installations get stacked. Having to rebid each project multiple times is also a huge factor and causes a loss of productivity.”

This year, cash flow also shot up as a top problem, going from 8% in 2024 and 6% in 2023 to 13% this year.

When it comes to installation itself, the general trend line over the last decade or so has been workforce issues-installers getting older, not enough young blood, competing for workers with other trades that pay more. Generally, workforce quality and workforce reliability combined have accounted for the bulk of votes. In recent years, scheduling issues and moisture complications have also become prominent. The two issues often stem from the same source: time pressure on general contractors, which leads to shortened schedules, concrete that needs more curing time, trades stepping on each other, lack of sufficient communication-much of which leads to adversarial relationships, only making matters worse.

This year, workforce issues have taken a back seat to jobsite conditions, the top problem for 48% of respondents, though it’s worth noting that until this year, it wasn’t added as a choice from the list-it was added because so many contract dealers, and increasing numbers of them, were writing it in under “other.” Nevertheless, the votes from its inclusion underscore the fundamental struggle these contractors face on the jobsite.

Workforce quality and reliability drew fewer votes this year likely because the commercial market is not firing on all cylinders, so the undersized installer pool is under less pressure.

ON PARTNERSHIPS

Contract dealers do their work in a partnership environment. The fulfillment of their projects is dependent on the functioning of these partnerships-with A&D, general contractors, facility managers, and flooring manufacturers and their reps.

To their credit, contract dealers always report that they seek to improve relationships, and at the same time they feel underutilized. From their perspective, too often A&D treats them like labor, deferring to the manufacturers for flooring issues; they feel that manufacturers treat them as a low priority; and general contractors show little consideration for their needs, leaving contractors to deal with the consequences. Overall, contract dealers contend that their inclusion in more of the planning, specifying, scheduling, etc., would lead to greater project efficiencies and, at the end of the day, more profitability.

What’s notable this year is that contract dealers report that all their relationships are improving, with the delta between “better” and “worse” votes wider than ever. In particular, it looks like relationships with reps and general contractors are moving strongly in the right direction.

When it comes to reps specifically, 54% of this year’s respondents characterize their relationships as excellent, and another 27% say they’re good. Another 13% are neutral, saying relationships are fair, and only 6% say they’re bad. And 79% say their relationships are characterized by trust, 21% by mistrust; 74% say their relationships are cooperative, and 26% say they’re competitive. Compared to last year, every one of these aspects has improved.

Mind you, there’s still a lot of room for improvement, according to respondents. One contract dealer wrote, “We’d like to see flooring manufacturers act more like strategic partners than product suppliers. That means offering transparent, consistent pricing; responsive technical support; and training for our installers so products are installed exactly to spec.”

Another wrote, “Improve communication of job schedule challenges and coordinate with material deliveries.” Also, “Would like to strengthen partnerships, and since we specify for them, would like them to bring leads to us.”

One contract dealer addressed the key issue of rapid response: “Need reps to be more responsive. It usually takes a week to get pricing back from the larger manufacturers such as Shaw and Mohawk, and when you are bidding projects, you really can’t be late. And they make us late on a regular basis.”

And one contract dealer, referencing the shift to net 30 terms by the big mills a couple of years ago, wrote, “Would love to see a return of early payment terms/discounts.”

One gripe that contract dealers have is manufacturers selling direct rather than going through contract dealers, impacting dealer revenues. Most would rather not install product they don’t sell, but the majority still do it when it comes up. This year, 56% say they’ll do this type of work, including 31% saying they’ll do it without reservation. And 44% don’t like it at all, including 14% who outright refuse to do it and 30% who prefer not to.

Some dealers felt strongly about the issue. One frustrated respondent wrote, “If a manufacturer is selling direct, they are not a partner to the dealer. I won’t lead with their product anywhere else.” Another wrote, “We can do it; however, installation price is doubled to make up for loss of revenue on materials.”

However, many contract dealers were more circumspect. One wrote, “We are fine with it. It’s a necessary evil.” Another wrote, “We’re open to helping the customer.”

When it comes to relationships with architects and designers, contract dealers more than anything want to be involved at the start of the project to offer their advice, head off problems down the road and have a more comprehensive understanding of the needs of the end user.

One contract dealer wrote, “We are usually brought in late and GC-driven. We often have no say so or weigh in for the applications or design intent and are left fixing it in the field.”

And another made a strong case for improved relationships: “We’d like to see architects and designers engage with us earlier in the project lifecycle and view flooring as an integral part of the design narrative, not just a finish to be specified at the end. Early collaboration allows us to share insight on product performance, installation methods and lifecycle costs-ensuring that what looks great on paper will also perform and maintain well in the field. We’d appreciate more transparency on design intent, budgets and scheduling so we can help them achieve their vision while minimizing network or substitutions later. Ultimately, a more open, solution-oriented partnership-where design aesthetics and practical installation expertise inform each other-leads to better outcomes for both the client and the project team.”

Contract dealers also partner a lot with facility managers (FMs), though the big problem is getting access to FMs, a busy group of people whose range of responsibilities is constantly growing. Nevertheless, beyond the need to collaborate more closely, contract dealers don’t have a lot of issues with FMs. One dealer cited a need for more stability, noting, “They are changing roles constantly.”

Another wrote, “Ideally, facility managers would approach flooring as a strategic asset rather than a reactive maintenance issue...a more collaborative partnership-where facility managers involve us early in project discussions and value our technical input. It would lead to better outcomes.”

The most contentious relationships for contract dealers are with general contractors; their actions have the biggest impact on a contract dealer’s ability to successfully execute their flooring installations. And a lot of it comes down to GCs not maintaining their albeit tight schedules, leaving the finish trades like flooring little time to get their work done, as this dealer noted: “Enforce the construction schedule from day one so it does not always fall on the finish people at the end!”

Another noted, “Accelerated schedules are not helping quality.” And yet another, “Don’t expect us to make up your scheduling problem when we walk on the job.”

As with all these partnerships, a strong commitment to communication is the most effective strategy. One dealer cited the need for “more communication both when things are going well and not so well.”

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