Mainstreet Commercial Update: Mainstreet flooring gives smaller businesses affordable alternatives for designing their spaces – Jan 2022
By Darius Helm
While the bulk of the commercial flooring market is specified through A&D and contract dealers, a substantial volume is transactional and flows through mainstreet, serving local businesses with lower-cost options that don’t have the high performance of specified commercial products. Specified flooring sales, both hard and soft, are currently rebounding from just over $5 billion back toward $6 billion, while mainstreet flooring is about a $1.3 billion business. According to Market Insights, in 2020, mainstreet was $1.27 billion, with $480 million in carpet and $793 million in hard surface in 2020.
Mainstreet is a poorly defined catch-all market sector. It’s not just hair salons, restaurants, mom-and-pop stores, dental offices and the like. It’s also churches, senior living spaces, schools and many other establishments that one would typically expect to be specified. In fact, the mainstreet market is best defined by what it isn’t; it’s everything that’s not residential and not specified commercial.
Mainstreet flooring generally has better performance characteristics and more design than typical residential flooring and, at the same time, doesn’t have the elevated design and performance required of specified commercial products. And it’s priced affordably, suiting the budgets and shorter-term leases of local businesses.
Carpet and LVT make up the bulk of mainstreet flooring, with smaller volumes of sheet goods, VCT, rubber and ceramic tile.
In terms of carpet, for a long time, polypropylene was commonly used as a mainstreet face fiber because its characteristics-low cost, short lifecycle-tended to fit the requirements of mainstreet clients. By the time the product uglied out through soiling and crushing, leases would be up, or the client would be ready for a renovation. But in recent years, polypropylene face fiber has fallen out of favor. With a melt point well below PET and nylon and an oleophilic nature that leads to easy soiling, polypropylene has been supplanted by the other fibers in mainstreet carpet. Many of the larger manufacturers are hitting those entry-level prices with PET carpet, and nylon 6 is also widely used.
Broadloom used to account for the bulk of mainstreet carpet, but in recent years the market has shifted heavily to carpet tile, though broadloom still has a cost advantage that makes it a compelling choice.
As is the case across all market segments, LVT has become the fastest-growing product in the mainstreet market. Gluedown flex LVT is a big piece of that, but rigid LVT (specifically SPC) is quickly overtaking it. In the specified market, SPC’s traction is limited, largely due to performance concerns from its click-system installation, but mainstreet environments don’t have the same performance requirements, and the lower cost of SPC has made it an attractive alternative.
It’s also worth noting that finished concrete has been taking share in mainstreet spaces, much like it has in the contract market. It’s a major investment and brings more downtime, but it’s low maintenance and can last decades, so it can be an option for customers that own their spaces, particularly for retail locations and, to some extent, even restaurants.
Many manufacturers serve the mainstreet market, often inadvertently, as local businesses go to residential dealers to meet their needs. However, a handful of larger firms with both commercial and residential offerings have dedicated mainstreet businesses. It’s not uncommon to find retailers that have a section in the back of their stores with mainstreet displays from Shaw, Mohawk or others, manned by RSAs that focus on building relationships with local businesses and often bring a more designer-oriented focus to the selling process.
The biggest player in the mainstreet market is Shaw Industries, going to market through its Philadelphia Commercial business, which dates back to 1846, according to Shaw. While Philadelphia is traditionally a mainstreet brand, its products have been increasingly specified in recent years and specified business now makes up a big chunk of Philadelphia Commercial, though the bulk still goes to mainstreet. In fact, Philadelphia’s offering is arranged in green and red folders, with green signifying typical mainstreet products focused on great value and price, and red signifying products with more of a specified commercial profile.
Shaw’s soft surface sales force goes to retailers with its Philadelphia Commercial program, which is mostly carpet with some hard surface flooring, and Shaw’s hard surface sales force goes to retailers with its 5th & Main brand, focused on hard surface programs. And retailers merchandise all these hard and soft surface products under the Philadelphia Commercial brand.
When it comes to carpet, Philadelphia’s face fibers include solution-dyed nylon 6, PET and polypropylene (PP), and the two primary backings are StrataWorx and EcoWorx. Polypropylene, which is used only on broadloom, is in decline, as it is across the industry, with a lot of that volume going to PET for both tile and broadloom. Some of that volume is going to nylon, as well, since rising PP costs have narrowed its price delta with nylon, making it only a small step up to get the better look and performance of a nylon carpet.
And Shaw’s hard surface offering centers on flex and rigid LVT, with the fastest growth in SPC. While rigid LVT is typically floated with a click system and flex LVT is glued down, Shaw also offers rigid LVT in gluedown and tongue and groove constructions.
In 2021, mainstreet business had a strong first half of the year, stuttered in Q3 largely due to Delta variant impacts and rebounded in Q4, falling a bit short of 2019 numbers. However, this year business is expected to post double-digit growth and exceed 2019 levels.
According to Kurt Paulson, the divisional vice president for Shaw Industries heading up its mainstreet business, key differentiators for Shaw include its customs department, which offers low minimums for customization of colors and backings, as well as its rendering services that create 2D and digital renderings of clients’ spaces and its Floorvana in-room visualization. RSAs can take photos of the space, upload them and create digital renderings on the spot.
And while a lot of mainstreet business comes from established relationships, Shaw also offers email and digital communications campaigns. And when its presence will help move a sale, Shaw will send reps to go on end-use calls with retailers.
Another well-established mainstreet brand is Mohawk Industries’ Aladdin Commercial, offering broadloom, carpet tile, vinyl flooring (sheet goods, flex LVT, rigid LVT) and even laminates, as well as a wide range of accessories and sundries. Aladdin dates back to 1957, when it was founded as Aladdin Mills. Mohawk acquired Aladdin in 1994.
Robb Myer, vice president of Aladdin, describes the offering as a curated package of coordinated products, a one-stop shop. Polypropylene, once a staple of mainstreet carpet, has been replaced with polyester and nylon in Aladdin’s carpet tile and broadloom constructions. While mainstreet carpet tile is about three times the size of mainstreet broadloom, broadloom is holding its own, in part because there are still plenty of applications where carpet tile doesn’t work (like stairs), and also because, despite the increasing affordability of carpet tile, broadloom is still the more affordable solution.
Aladdin’s products are sometimes specified through A&D as a low-cost solution to meet a budget, though this accounts for less than 5% of Aladdin’s total revenues.
In terms of product trends, Myer reports that rigid LVT is making huge inroads, and sales of RevWood Plus laminates are also up, with the waterproof story driving interest in both product categories.
In addition to offering a curated, coordinated product offering across all categories, over the last couple of years Aladdin has also added 15 business development managers, deployed all across the country, to guide RSAs on how to find and nurture potential clientele and on the full breadth of Aladdin’s offering. Myer, brought over from the Mohawk Group in 2019, was the first of these managers. The program has been promoted at Mohawk’s Momentum road shows over the last couple of years.
After business ground to a virtual halt in the spring of 2020, Aladdin has been showing consistent growth. Revenues in 2021 were still shy of 2019’s results, and 2022 should be another year of steady growth. The firm’s strategy of carefully managing its SKUs, keeping what’s selling and ditching the underperformers, has helped Aladdin weather the storm of supply chain disruptions and, to some extent, price increases, according to Myer.
At Surfaces 2017, Engineered Floors, which at the time had only been around for about eight years, introduced Pentz Commercial Flooring Solutions, its dedicated mainstreet brand, showcasing a range of crisp, tailored carpet designs. Over the last five years, the business has been expanded and refined, now offering carpet tile, broadloom using Apex PET and Encore nylon face fibers, both solution-dyed, along with gluedown and looselay LVT.
While Pentz is focused on the transactional mainstreet market, its products also target the specified market. According to Eric Ruppert, residential brand manager at Engineered Floors, “Our comprehensive lineup of carpet tile, broadloom and hard surfaces give our retailers multiple options to capture negotiated and specified opportunities that walk through the door.”
The firm’s mainstreet business “took a hard hit in 2020” before starting to rebound in Q3. Ruppert notes that the firm saw success in all categories throughout 2021 and anticipates further gains this year.
Ruppert adds, “Pentz has focused on styling products that are readily available on the shelf. Pentz will continue to focus on our core values of quality, reliability and service as we move into 2022.”
Mannington Mills serves the residential market through its hard surface Mannington brand as well as through Phenix Flooring, a predominantly residential carpet producer acquired along with Pharr Fibers and Yarns in early 2020. Phenix came with its Phenix on Main mainstreet division, which was launched in early 2018. And in late 2020, Mannington launched its own mainstreet brand, Mannington on Main. While Phenix on Main offers broadloom and carpet tile, Mannington on Main covers the hard surface side with a comprehensive offering of flex and rigid LVT, glass-backed and felt-backed sheet goods, rubber products, wall base and more. So far, Mannington has not announced any plans for merging the two mainstreet businesses.
Prior to Mannington on Main, the firm served the mainstreet market through its commercial division, so many of its products were over-engineered for the needs of the market. Now it’s managed by the residential division and channeled through residential dealers with a curated product line developed for the mainstreet market, more affordably priced than specified products and with performance parameters suited to residential and light commercial needs-along with a small selection of higher-performing commercial products, like 2.5mm gluedown LVT with a 20 mil wearlayer.
When Mannington relaunched its mainstreet business under its new brand, it focused on the needs of mainstreet dealers, including addressing the overwhelming amount of product in the market. And it merchandised the offering in displays that look a lot like residential displays, which in addition feature usage charts that serve as quick guides for RSAs on typical mainstreet applications as well as adhesive offerings and its Microban treatment for applications like senior living, daycare and dentistry that require more sterile environments.
Another major player with a dedicated mainstreet business is The Dixie Group, which goes to the mainstreet market through its Masland Energy brand. Dixie has been serving the mainstreet market for decades, and around 2005, the firm created the Energy mainstreet brand, which ended up held back from gaining strong traction by the ensuing recession. It was later remerchandised as Office to Home before the Energy brand was resurrected under Masland in 2018. According to CEO Dan Frierson in his 2018 year-end comments, “This highly styled mainstreet category was developed by Masland in the mid-2000s, and we are reinvigorating this line with new products, designs and an updated selling vehicle.”
Most of what is sold through Energy is nylon 6,6 carpet, along with a small but growing volume of LVT. Like The Dixie Group’s residential brands and its former commercial brand, AtlasMasland, which was sold to Mannington last summer, Energy targets the better end of its market, ranging from retail stores and medical offices to country clubs, restaurants and public space in condos.
One of the biggest challenges facing the Energy brand is organizing its product offering. The firm’s mainstreet inventory has traditionally relied heavily on carpet from its commercial division, so the sale of AtlasMasland has forced the firm to pursue new product development strategies. Dixie is currently designing some mainstreet broadloom for Energy, and it won’t be offering mainstreet carpet tile, at least for 2022.
Resilient specialist Armstrong Flooring, headquartered in Lancaster, Pennsylvania, serves the mainstreet market with its total commercial portfolio, comprising flexible and rigid LVT, homogeneous and heterogeneous sheet vinyl, static control and slip-retardant flooring, and both VCT and its PVC-free equivalent, BBT, a polyester composition tile. The firm also recently introduced Empower, a rigid LVT with a magnesium core.
According to Yon Hinkle, Armstrong’s vice president of product management, VCT, which has been losing share for decades (mostly to LVT and concrete), still has a place in the mainstreet market, like in local retail applications, while sheet goods are more hit-and-miss. Overall, its mainstreet business is heavily dominated by LVT. In fact, the firm recently launched a quick-ship LVT program, with products shipped within five days, using LVT from its Lancaster production facility.
Cognizant of how flooring retailers can overwhelm potential customers with a sea of products, Armstrong’s new mainstreet display, which it will start rolling out later this quarter, is deliberately compact, offering a curated selection from each of its flooring categories.
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