Reports of robust consumer spending on travel and entertainment has continued to boost U.S. gross domestic product (GDP) in recent quarters, but that outlay has not trickled down to the flooring sector to the same degree. That’s according to dealers who reported a mostly flat Q1.
Just as the flooring industry benefited greatly by spending during the COVID-19 pandemic—when consumers stayed home and spent lavishly on home renovations, including flooring—the pendulum has swung the other way. Consumer spending on foreign trips and live entertainment rose by nearly 30% in 2023, The Washington Post reported. European summer vacations were particularly popular, with a 26% increase from the previous year.
Taylor Swift’s Eras Tour, meanwhile, brought in more revenue in North America in 2023 than dozens of nations generate in a year, amassing upwards of $1 billion in ticket sales alone for the North American tour.
What’s more, consumers spent $145.5 billion more in February 2024 than they did the month before—much of that on services—fueling the biggest monthly increase in more than a year, according to data from the Bureau of Economic Analysis. Flooring retailers in the U.S. and Canada, however, have struggled just to stay even. “Q1 numbers are flat overall; retail is down compared to the same time last year,” said Raffi Sarmazian, co-owner of Sarmazian Brothers Flooring, Waterloo, Ontario, Canada. “I’m hoping things have bottomed out and expecting business to pick up.”
The scenario was much the same in the U.S. in Q1/early Q2. “We are flat for the year,” said Eric Mondragon, hard surface buyer for RC Willey, Salt Lake City. “Hard surface was up 7% and carpet was down 7%. I expect Q2 to be the same unless the Fed lowers interest rates. It’s just too expensive to borrow money for home projects. The only other thing that could change that is a wet spring and flooding, although we hate to capitalize on natural disasters.”
While some flooring retailers say business is actually up from 2023, most say it is flat to down a few percentage points. What all seem to agree on is an unpredictable, topsy-turvy beginning to what many expect will be a turbulent presidential election year.
“We had a strong start to the year and were up considerably from last year, but we leveled off some in March,” said Alex Roberts, CEO of Roberts Carpet & Fine Floors, Houston. “We’re still up against Q1 2023, but not as dramatically. It will be a tough year, but we have some new strategies in place that seem to be working for us. We expect business to continue to be up from last year but we’re in a repressed economy so traffic will come in waves.”
That inconsistency in retail traffic best describes Barefoot Flooring’s 2024 start, with the Castle Hayne, N.C., retailer experiencing a few bright spots in Q1 before a downturn in March. “We anticipate a rebound in Q2 as spring has historically been robust,” said John Bretzloff, owner. “Hardwood has made a strong showing vs. LVP thus far in ’24, which is a welcome change.”
For Napa, Calif.-based Abbey Carpets Unlimited, business is off about 10% from last year; how- ever, there has been an uptick in customer traffic in recent weeks after a slow January-February period. “I think the uncertainty in an election year often causes hesitancy in large purchases,” said Janice Clifton, owner. “No matter what your party, there is concern over the election results and the effect on the economy.”
Retailers cited a tightening of credit card approvals as another reason for the slowdown, which in some instances is impacting the remodel business. “I canvassed my builder and remodel contractors the last few weeks of March and they all said that they are experiencing a slowing in future jobs,” said Tony Fry, owner of CarpetsPlus ColorTile, Winnsboro, Texas. “Most were booked out for months, now only weeks.”
Not all retailers are feeling the spring blues. The first three months have been extremely active for Lake Interiors, Chelan, Wash. In the early going a cold snap caused a spate of broken water pipes that flooded homes, leading to a surge in new flooring requests. That was followed in March by a spike in remodeling that led to more business. As Don Cantor, owner, explained: “We live in a resort area, and everyone wants their jobs done before Memorial Day weekend. We have been selling a lot of high-end hardwood and Hunter Douglas blinds, and carpet seems to be picking up steam again. We are very pleased with how the first quarter ended and are looking forward to a great second quarter.”
A bright spot for RC Willey is how fast they have been able to move away from low-end SPC into better products across WPC, laminate and wood. That’s in line with other dealers who agree there has been a noticeable move away from cheap SPC to thicker WPC and back into hardwood.
