Article Number : 1654 |
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| Date | 1/15/2007 8:11:35 AM |
| Written By | LGM & Associates Technical Flooring Services |
| View this article at: | //floorbiz.com/BizResources/NPViewArticle.asp?ArticleID=1654 |
| Abstract | Hicksville, N.Y.—It would seem the carpet industry is in a bit of a funk. Despite the myriad of technological advances in fibers, and the award-winning styles and fashion coming from the category in recent years, sales continue to be up mainly... |
| Article | Hicksville, N.Y.—It would seem the carpet industry is in a bit of a funk. Despite the myriad of technological advances in fibers, and the award-winning styles and fashion coming from the category in recent years, sales continue to be up mainly from the numerous price increases manufacturers have had to implement to keep up with rising costs. At the same time, overall units sold remain relatively flat. If this trend continues for the remainder of 2006, it will be the second year in a row volume was at a near standstill. Put simply, this means the overall amount of carpet sold is, for the sake of argument, the same as 2004. It would also mark the second straight year sales figures rose mostly due to the price hikes. When put together, it adds up to slim margins and profits that are harder to come by. If conditions remain as industry experts predict, the segment will see a 5% to 6% rise in sales over last year with shipments running flat to even slightly down by some accounts. This is based on research conducted by Floor Covering News, which showed in 2005 carpet sales increased 7.1% over 2004 to $12.438 billion, following a 9.4% jump over 2003’s figures. At the same time, square footage was up only 0.4% to 18.37 billion square yards in 2005 compared to 2004, which also saw total shipments at near zero growth related to 2003. While efforts continue to be made to reduce and cut costs from the system, manufacturing expenses—buying the raw materials, producing a roll of carpet and, finally, delivering the product to a retailer—continue to spiral upwards at unprecedented speeds. And none of this takes into account the added costs of healthcare and other expenses that have continually risen faster than sales can keep up. Still, with everything going on, most believe they have a significant number of opportunities that can counteract the negatives. As for the products, which manufacturers note are more durable, comfortable and stylish than ever before, consumers are once again finding an appreciation for them, especially at the higher price points. “There is a continuing trend toward upscale products,” said Dave Duncan, vice president of marketing, Mohawk. “This has resulted in a significant increase in higher margin sales for our dealers—if they know how to focus on these customers.” |