Nearing the finish line of an unpredictable, yet mostly fulfilling year, flooring retailers can take solace in the fact that while retail traffic slowed in 2023, the average ticket was higher than in previous years, boosting profit margins for many.
What virtually all dealers can agree on is this: 2023 results exceeded expectations against the backdrop of a doom and gloom forecast 10 months earlier. In fact, the feared recession many economists predicted never materialized as consumers continued to defy all odds by spending robustly despite higher interest rates.
What’s also true is that 2023 has been a difficult year to predict, given the topsy-turvy nature of retail traffic. As Cathy Buchanan, co-owner of Independent Carpet One Floor & Home, Westland, Mich., explained: “There has been no rhyme or reason to it. For example, we had 18 customers two Saturdays ago; this past Saturday, we had nine—which makes it very hard to gauge staffing. With the auto strike happening about one mile from my store, I was happy traffic wasn’t worse. It could have truly put a major damper on our fourth quarter.”
Despite the unevenness, Buchanan reported a “much better” October fueled in part by a three-day private sale as well as the annual National Karastan sale.
The fourth quarter got off to an “odd” start for Kelby Frederick as well. The owner of My Flooring America, with multiple locations in the Lone Star State, experienced a slow beginning followed by a nice rebound. “We ended up with a very strong sales month in October in several of our locations,” he said. “We feel we have some momentum going into November.”
After its slowest September in four years, Lake Interiors Chelan, in Chelan, Wash., also witnessed a rapid turnaround, according to owner Don Cantor. “October was back to normal for us, and November and December are shaping up to be busy months,” he said. “Actual foot traffic has slowed down a little, but the sales that are coming in are larger and more profitable. I’ve talked to a lot of dealers from around the country. Many of the dealers said the same thing: foot traffic is down but sales are up or about the same as last year and profits are up.”
With residential retail softer than desired, it behooves flooring dealers to be well positioned in other segments. To that end, commercial has been a strong suit for many. “Commercial continues to thrive in our market,” said Casey Dillabaugh, owner of Dillabaugh’s Flooring America, Boise, Idaho. “I’m incredibly proud of our sales professionals’ ability to close the opportunities we’re getting. From a retail perspective, I believe we’re in for a slow few quarters, allowing us the opportunity to differentiate further and grab market share when we return to normal traffic levels.”
In nearby Nampa, Idaho, retail traffic has picked up of late for Nampa Floors & Interiors, adding to an already strong commercial pipeline, according to owner Kyal Wilson. The one caveat? “Single-family new construction is still on a slow climb and nowhere near where it was a year ago,” he said.
Typical of many retail scenarios this year, Carpetland USA (The Langan Group), with nine locations in Iowa and Illinois, saw an uptick in retail sales and traffic in September before running into a more “erratic” October. “I suspect that we will finish up in the fourth quarter as we are up against softer numbers from the same period last year,” said Eric Langan, president/owner.
When is a flat year a win? When it’s 2023 and flooring dealers don’t have the last vestiges of the pandemic to spur top-line sales. “From the information we get from suppliers, we feel fortunate to be flat,” said Doug Peeples, manager of Nashville-based Myers Carpet. “For the most part, we have remained flat to just a little behind last year’s sales numbers all year. We really have not noticed much fluctuation at all.”
Of course, there are always exceptions. A case in point is Montgomery’s CarpetsPlus Colortile, Venice, Fla. Montgomery’s has been super busy in the aftermath of Hurricane Ian, which ravaged Southwest Florida in September 2022. Comparing Sept. 1 through Oct. 31, 2022, with the same period this year, Montgomery’s is up 20% in sales and profits and almost 22% for the year. “The biggest contributing factor I believe for this increase was the hurricane last year that impacted us for quite a while.,” co-owner Mike Montgomery said. “Retail traffic as well as commercial work has picked up.”
