Hardwood Floors Oct/Nov 2019

MARKET MATTERS INDUSTRY INSIGHTS

Photo courtesy of Mouery’s Flooring Springfield, Missouri

Retail distribution channels are important to wood flooring manufacturers and distributors due to their heavy dependence on the residential replacement market. The Main Street commercial market (consisting of retailers, professional offices, and service providers) is another potential market for retailers. Residential replacement and Main Street commercial markets represent about 51 percent of total wood flooring sales. However, a weak housing market and increased competition from luxury vinyl tile have caused wood flooring retail sales to decline between 2017 and 2019. During 2019, wood flooring retail sales are estimated to decline by 6.4 percent to $5.7 billion. As a result, wood flooring lost share of total U.S. floor coverings retail sales. Wood flooring’s share could decline to 13.9 percent of total retail floor coverings sales during 2019. This is down from 15.6 percent in 2017. This reversed some of the inroads made by wood flooring between 2007 and 2017. Wood Flooring Retail Distribution Channels

The most important retail channel for wood flooring is specialty floor coverings stores. Wood flooring is more likely to be sold by a specialty floor coverings retail store (retailers with 50 percent or more of total revenues derived from the sale of carpet and area rugs) since specialty floor covering retailers are better able to satisfy the needs of the higher-end buyer attracted to wood flooring than big box retailers. As a result, specialty floor coverings retail stores are estimated to capture some 48 percent of total wood flooring retail sales during 2019. This is higher than specialty floor coverings retailers’ 41 percent share of total floor coverings retailing. However, specialty floor coverings stores have experienced increased competition from value-priced hard surface flooring retailers such as Floor & Decor. Hard surface flooring retailers also have relatively high levels of wood flooring sales per store. Value-priced hard surface floor covering retailers gained share as manufacturers introduced factory-finished and easier-to-install wood flooring and foreign manufacturers imported competitively priced engineered wood flooring. These flooring products were targeted to the do-it-yourself buyer who generally is served by home centers and value- priced hard surface flooring retailers. In 2019, value-priced hard surface flooring retailers could have captured 30.2 percent of total wood flooring retail sales, up from an 18.3

hardwood floors www.hardwoodfloorsmag.com

16