TABLE OF CONTENTS U.S. FLOOR COVERINGS SPENDING TRENDS AND DISTRIBUTION CHANNEL ANALYSIS... 1 Summary Of Major Findings... 1 Installed Value Of Floor Coverings Spending... 2 Hard Surface Versus Soft Surface Floor Coverings Spending... 3 Floor Coverings Spending By End-Use Markets... 4 Floor Coverings Retail Channels... 5 Distributor Trends... 7 Contractor Business Trends... 8 Outlook... 8 Table 1-1 Value Of U.S. Installed Flooring Spending, 1997-2017 (dollars)... 10 Figure 1-1 Value Of U.S. Installed Flooring Spending, 1997-2017 (dollars)... 11 Table 1-2 Value Of U.S. Floor Coverings End-User Purchases And Flooring Installation Revenues, 1997-2017 (dollars)... 12 Table 1-3 Comparison Of Manufacturer Flooring Product Sales To Final Sales, 1997-2017 (dollars)... 13 Table 1-4 U.S. Average Value Per Square Foot Of Floor Coverings Sold To End Users And With Installation, 1997-2017 (square feet and dollars)... 14 Table 1-5 Value Of U.S. Installed Flooring Spending For Soft And Hard Surface Flooring, 1997-2017 (dollars)... 15 Table 1-6 U.S. Average Value Per Square Foot Of Floor Coverings Installed For Soft And Hard Surface Flooring, 1997-2017 (dollars)... 16 Table 1-7 Value Of U.S. Floor Coverings End-User Purchases For Soft And Hard Surface Flooring, 1997-2017 (dollars)... 17 Table 1-8 U.S. Average Value Per Square Foot Of Floor Coverings Sold To End Users For Soft And Hard Surface Flooring, 1997-2017 (square feet and dollars)... 18 SECTION 1 Table 1-9 Value Of U.S. Installed Flooring Spending By Market, 1997-2017 (dollars): Residential Replacement, Builders, Commercial, And Transportation Equipment... 19 i
Table 1-10 Percent Distribution Of U.S. Installed Flooring Spending By Market, 1997-2017 (percent): Residential Replacement, Builders, Commercial, And Transportation Equipment... 20 Table 1-11 U.S. Installed Flooring Spending By Market For Product And Labor, 1997-2017 (dollars): Residential Replacement, Builder, And Commercial... 21 Table 1-12 Value Of U.S. Floor Coverings End-User Purchases By Market And Type Of Flooring, 1997-2017 (dollars): Residential Replacement, Builders, Commercial, And Transportation Equipment; Soft And Hard Surface Flooring... 22 Table 1-13 Value Of U.S. Floor Coverings Purchases By Channel, 1997-2017 (dollars): Specialty Floor Coverings Stores, Home Centers, Other Building Material Dealers, Other Retail Stores, Shop-At-Home, Distributors, And Manufacturers... 23 Figure 1-2 Share Of U.S. Flooring Manufacturer, Distributor, And Retailer Sales To Final End Users, 2012 (percent)... 24 SCOPE AND METHODOLOGY... 25 U.S. CONSUMER FLOOR COVERINGS SPENDING AND PURCHASER DEMOGRAPHICS... 28 Summary Of Major Findings... 28 Consumer Floor Coverings Spending... 29 Soft Versus Hard Surface Flooring Purchases... 29 Homeowner Flooring Replacement Jobs... 30 Purchases By Income... 31 Purchases By Age... 33 Purchases By Family Size... 34 Purchases By Region... 34 Consumer Floor Coverings Purchases By Channel... 35 Table 2-1 U.S. Consumer Spending On Installed Floor Coverings, 1997-2012 (dollars): Floor Coverings Purchases And Installation Service Spending... 36 Table 2-2 U.S. Consumer Spending On Soft Surface And Hard Surface Flooring, 1997-2012 (dollars)... 37 SECTION 2 Table 2-3 U.S. Consumer Spending On Flooring Products And Installation By Type Of Flooring, 1997-2012 (dollars): Wall-To-Wall Carpet, Carpet Cushion, Area Rugs And Scatter Rugs, And Hard Surface Flooring... 38 ii
Table 2-4 Table 2-5 Table 2-6 Table 2-7 Table 2-8 Table 2-9 Table 2-10 Table 2-11 Table 2-12 Table 2-13 U.S. Consumer Price Index For Soft Surface Floor Coverings, 1998-2012 (index)... 39 Number Of U.S. Homeowner Flooring Replacement, Maintenance, And Repair Jobs And By Recent Movers And Region, 2003-2012 (number): Wall-To-Wall Carpet And Hard Surfaces... 40 Number Of U.S. Homeowner Wall-To-Wall Carpet Replacement, Maintenance, And Repair Jobs And By Recent Movers And Region, 2003-2012 (number): Do-It-Yourself And Contractor Jobs... 42 Number Of U.S. Homeowner Hard Surface Flooring Replacement, Maintenance, And Repair Jobs And By Recent Movers And Region, 2003-2012 (number): Do-It-Yourself And Contractor Jobs... 43 U.S. Household Floor Coverings And Installation Spending By Demographic Characteristic, 2002-2010 (dollars): Household Income, Age Of Household Head, Size Of Household, And Region... 44 Average U.S. Household Floor Coverings And Installation Spending By Demographic Characteristic, 2002-2010 (dollars): Household Income, Age Of Household Head, Size Of Household, And Region... 45 U.S. Household Spending On Soft Surface Flooring And Installation By Demographic Characteristic, 2002-2010 (dollars): Household Income, Age Of Household Head, Size Of Household, And Region... 46 U.S. Household Spending On Carpet Versus Area Rugs By Demographic Characteristic, 2010 (dollars): Household Income, Age Of Household Head, Size Of Household, And Region... 47 U.S. Household Spending On Hard Surface Flooring And Installation By Demographic Characteristic, 2002-2010 (dollars): Household Income, Age Of Household Head, Size Of Household, And Region... 49 Average U.S. Household Spending On Hard Surface Flooring And Installation Through Contractors And D-I-Y And B-I-Y Purchases By Demographic Characteristic, 2010 (dollars): Household Income, Age Of Household Head, Size Of Household, And Region... 50 iii
Table 2-14 Table 2-15 Percent Distribution Of U.S. Household Floor Coverings And Installation Spending For Soft And Hard Surface Flooring By Demographic Characteristic, 2002-2010 (percent): Household Income, Age Of Household Head, Size Of Household, And Region... 52 Value Of U.S. Consumer Floor Coverings Purchases By Channel, 1997-2012 (dollars): Specialty Floor Coverings Stores, Home Centers, Other Building Material Retailers, Other Retail Stores, Shop-At-Home, Distributors, And Manufacturers... 53 U.S. BUILDER AND COMMERCIAL MARKET FLOOR COVERINGS SPENDING... 54 Builder Floor Coverings Spending Trends... 54 Commercial Market Floor Coverings Spending Trends... 55 Builder, Contractor, And Commercial Market Floor Coverings Purchases By Channel... 56 Table 3-1 U.S. Builder Spending On Installed Floor Coverings, 1997-2012 (dollars): Floor Covering Purchases And Installation Cost... 58 Table 3-2 Total U.S. Builder Square Feet Construction And Average Value Per Square Foot Of Flooring Installed, 1997-2012 (number and dollars)... 59 Table 3-3 Number Of U.S. New Housing Units Completed And Square Feet Built, 1997-2012 (number): Single-Family Homes, Multi- Family Housing Units, And Manufactured Homes... 60 Table 3-4 U.S. Builder Purchases Of Soft Surface And Hard Surface Flooring, 1997-2012 (dollars)... 61 Table 3-5 U.S. Commercial Market Spending On Installed Floor Coverings, 1997-2012 (dollars): Floor Coverings Purchases And Installation Cost... 62 Table 3-6 U.S. Commercial Market Purchases Of Soft Surface And Hard Surface Flooring, 1997-2012 (dollars)... 63 Table 3-7 Value Of Builder And Contractor Floor Coverings Purchases By Channel, 1997-2012 (dollars): Specialty Floor Coverings Stores, Home Centers, Other Building Material Retailers, Distributors, And Manufacturers... 64 SECTION 3 Table 3-8 Value Of Commercial And Government Floor Coverings Purchases By Channel, 1997-2012 (dollars): Specialty Floor Coverings Stores, Home Centers, Other Building Material Retailers, Distributors, And Manufacturers... 65 iv
SECTION 4 U.S. FLOOR COVERINGS RETAIL DISTRIBUTION CHANNELS... 66 Summary Of Major Findings... 66 Retail Sales By Channel... 67 Retail Sales By Surface Material... 68 Specialty Floor Coverings Stores Trends... 70 Home Center Trends... 71 Hard Surface Floor Coverings Store Trends... 72 Mass Merchandiser Floor Coverings Sales... 72 Leading Floor Coverings Retailer Market Shares... 73 Table 4-1 U.S. Retail Floor Coverings Sales By Type Of Channel, 1997-2012 (dollars): Specialty Floor Coverings Stores, Home Centers, Hard Surface Flooring Stores, Furniture Stores, Department Stores, Other Home Furnishings Stores, Warehouse Clubs And Super Centers, Direct Sellers, Electronic And Internet, And Others... 75 Table 4-2 Percent Distribution Of U.S. Retail Floor Coverings Sales By Type Of Channel, 1997-2012 (percent): Specialty Floor Coverings Stores, Home Centers, Hard Surface Flooring Stores, Furniture Stores, Department Stores, Other Home Furnishings Stores, Warehouse Clubs And Super Centers, Direct Sellers, Electronic And Internet, And Others... 76 Table 4-3 Number Of U.S. Retailers Carrying Floor Coverings By Type Of Channel And Average Sales, 1997-2012 (number): Specialty Floor Coverings Stores, Home Centers, Hard Surface Flooring Stores, Direct Sellers, Other Home Furnishings Stores, Furniture Stores, Warehouse Clubs And Super Centers, Department Stores, Electronic And Internet, And Others... 77 Table 4-4 Average Floor Coverings Sales Per Retail Outlet By Type Of Channel, 1997-2012 (dollars): Specialty Floor Coverings Stores, Home Centers, Hard Surface Flooring Stores, Direct Sellers, Other Home Furnishings Stores, Furniture Stores, Warehouse Clubs And Super Centers, Department Stores, Electronic And Internet, And Others... 78 Table 4-5 U.S. Retail Floor Coverings Sales By Type Of Surface Material By Type Of Channel, 1997-2012 (dollars): Specialty Floor Coverings Stores, Home Centers, Other Building Material Dealers, And Other Retailers; Soft Surface And Hard Surface Flooring... 79 v
Table 4-6 Percent Of Soft Surface And Hard Surface Flooring Retail Sales By Type Of Channel, 1997-2012 (percent): Specialty Floor Coverings Stores, Home Centers, Other Building Material Dealers, And Other Retailers... 81 Table 4-7 Percent Distribution Of U.S. Retailer Sales By Type Of Customer And Outlet, 1997-2012 (percent): Households, Builders And Contractors, Commercial And Government, And Other Retailers And Wholesalers; Specialty Floor Coverings Stores, Home Centers, And Other Building Material Retailers... 82 Table 4-8 U.S. Floor Covering Store Employment, Hourly Wages, And Weekly Hours, 2002-2012 (number and dollars)... 83 Table 4-9 U.S. Specialty Floor Coverings Store Delivery And Installation Charges And Other Nonmerchandise Revenues, 1992-2011 (dollars): Floor Coverings Sales, Other Merchandise Sales, Delivery And Installation Charges, Other Labor Charges, Carpet Repair And Cleaning Revenues, And Other Revenues... 84 Table 4-10 Number Of U.S. Specialty Floor Coverings Stores With Nonmerchandise Revenues And Percent Of Sales For Those Stores With Such Charges, 1992-2007 (number and percent): Delivery And Installation Charges, Other Labor Charges, Carpet Repair And Cleaning Revenues, And Other Revenues... 85 Table 4-11 Percent Distribution Of U.S. Floor Coverings Stores And Sales By Employee Size, And Multi-Store Chains, 2002-2010 (percent)... 86 Table 4-12 Share Of U.S. Retail Floor Coverings Sales For The Top Ten Retailers, 2007-2011 (percent)... 87 Table 4-13 U.S. Sales And Locations Of Leading Floor Coverings Retailers By Type Of Chain, 2011 (number and dollars): Building Material Retailers, Mass Merchandisers, And Carpet And Other Floor Covering Retailers... 88 Table 4-14 Sales And Locations For The Top Twenty Floor Coverings Retail Chains, 2011 And 2012 (dollars and number)... 89 Table 4-15 Lowe's Companies Floor Coverings Sales, 1998-2012 (dollars)... 90 Table 4-16 Sales And Profit Trends For Lumber Liquidators, 2007-2012 (dollars and percent): Sales, Cost Of Sales, SGA, Operating Income, Number Of Stores, And Merchandise Inventories... 91 Table 4-17 Percent Distribution Of Lumber Liquidators Sales By Type Of Flooring, 2007-2011 (percent): Solid Hardwood, Engineered Hardwood, Laminates, Moldings And Accessories, Bamboo And Cork, And Other... 92 vi
PROFILES OF THE TOP EIGHT U.S. FLOOR COVERINGS RETAILERS... 93 Empire Today LLC... 93 Floor & Decor Outlets Of America... 93 The Home Depot, Inc.... 94 Lowe s Companies, Inc.... 95 Lumber Liquidators, Inc.... 96 The Sherwin-Williams Co.... 99 Target Corp.... 100 Walmart Stores Inc.... 100 SECTION 5 RETAIL BUYING GROUPS... 102 Summary Of Major Findings... 102 Leading Buying Groups... 102 Table 5-1 Number Of Locations And System Sales For Five Retail Buying Groups, 2011 (number and dollars)... 104 Table 5-2 Abbey Carpet Revenue And Operating Income Trends, 2007-2011 (dollars)... 105 Table 5-3 Number Of U.S. Abbey Franchised Outlets By Region And State, 2007-2011 (number)... 106 Table 5-4 National Floorcoverings Alliance Members And Number Of Stores, September 2012... 108 PROFILES OF LEADING BUYING GROUPS AND FRANCHISORS... 110 Abbey Carpet Co.... 110 Alliance Flooring Inc.... 111 American Home Surfaces Group, Inc.... 112 CCA Global Partners... 113 National Floorcovering Alliance... 115 SECTION 6 U.S. DISTRIBUTOR (WHOLESALER) FLOOR COVERINGS CHANNEL... 116 Distributor (Wholesaler) Sales Trends... 116 Sales By End-Use Market... 117 Competitive Environment And Leading Distributors... 117 Distribution Strategies For Leading Manufacturers... 118 Table 6-1 U.S. Wholesale Floor Coverings Sales And Number Of Wholesalers Selling Flooring, 1997-2012 (dollars and number)... 121 vii
Table 6-2 U.S. Wholesale Floor Coverings Sales Of Soft And Hard Surface Products, 1997-2012 (dollars)... 122 Table 6-3 Number And Sales Of Merchant Wholesalers And Manufacturer Sales Offices And Sales By Type Of Customer, 1997-2012 (number, dollars, and percent)... 123 Table 6-4 Sales Trends For The Top Twelve Floor Coverings Merchant Wholesalers (Distributors), 2002-2011 (number)... 124 Table 6-5 Operating Ratios And Profit Margins Of U.S. Floor Coverings Merchant Wholesalers (Distributors), 1997-2007 (dollars and percent): Sales, Flooring Material Purchases, Operating Expenses, And Profit Margins... 125 PROFILES OF THE TOP FIVE U.S. DISTRIBUTORS... 126 BPI... 126 CMH Space Flooring... 126 J.J. Haines & Co... 127 NRF Distributors... 128 William M. Bird & Co... 129 DISTRIBUTION STRATEGIES OF LEADING U.S. FLOOR COVERINGS MANUFACTURERS... 130 Armstrong World Industries, Inc.... 130 Beaulieu Of America LLC... 131 The Dixie Group, Inc... 132 Interface, Inc... 132 Mannington Mills, Inc... 134 Mohawk Industries, Inc... 135 Shaw Industries... 139 Tarkett... 140 SECTION 7 U.S. FLOOR COVERINGS INSTALLATION BUSINESS... 141 Floor Coverings Contractor Revenues... 141 Revenues By Type Of Installation Work... 141 Installation Revenues Per Square Foot... 142 Revenues By Type Of Construction Project... 143 Material And Labor Costs... 143 Installation Product And Tool Marketer... 144 viii
Table 7-1 Table 7-2 Table 7-3 Table 7-4 Table 7-5 Table 7-6 Table 7-7 Table 7-8 Table 7-9 U.S. Floor Coverings Installation Contractor Revenues By Type Of Flooring, 1997-2012 (dollars): Carpet, Ceramic Tile, Wood Flooring, Resilient And Laminate Flooring, Stone, And Computer Floors... 146 U.S. Contractor Revenues Per Square Foot Installed By Type Of Flooring, 1997-2012 (dollars): Wall-To-Wall Carpet, Ceramic Tile, Wood Flooring, And Resilient And Laminate Flooring... 147 Flooring Material And Supply Purchases Of U.S. Builders And Flooring Contractors, 1997-2012 (dollars)... 148 Number, Revenues, And Costs Of U.S. Floor Coverings Installation Contractors, 1997-2012 (number, dollars, and costs)... 149 U.S. Flooring Contractor Employment, Hourly Wages, And Weekly Hours, 2002-2012 (number and dollars): Ceramic Tile And Other Flooring Contractors... 150 Value Of U.S. Floor Contractor Revenues By Market And Type Of Construction, 1997-2012 (dollars): Residential And Nonresidential; And New Construction; Additions And Remodeling, And Maintenance And Repair... 151 Value Of U.S. Floor Coverings Contractor Revenues By Type Of Nonresidential Building, 2007 And 2012 (dollars)... 152 U.S. Spending On Nonresidential Building Construction Put In Place By Building Type, 2008-2012 (dollars): Lodging, Office, Commercial, Healthcare, Educational, Religious, Public Safety, Amusement And Recreation, Manufacturing, And Other Public Buildings... 153 Sales And Profit Trends For Q.E.P., 2006-2011 (dollars and percent)... 154 REGIONAL AND STATE REVENUES FOR RETAILERS, DISTRIBUTORS, AND CONTRACTORS... 155 Summary Of Major Findings... 155 Regional Retail Floor Coverings Markets... 155 Regional Distributor Sales Trends... 156 Revenues And Number Of Contractors By Region... 157 Table 8-1 Total U.S. Retail Floor Coverings Sales By Region And State, 2002-2011 (dollars)... 158 Table 8-2 U.S. Per Capita Retail Floor Coverings Sales By Region And State, 1997-2011 (dollars)... 161 SECTION 8 Table 8-3 Percent Distribution Of U.S. Retail Floor Coverings Sales For Soft And Hard Surface Flooring, 2002 And 2007 (percent)... 163 ix
Table 8-4 Number Of U.S. Retail Outlets Selling Floor Coverings By Region And State And Average Revenues Per Store, 2002-2011 (number and dollars)... 165 Table 8-5 Percent Distribution Of U.S. Retail Floor Coverings Sales By Type Of Channel, 2007 (percent): Floor Coverings Stores, Home Centers, Other Building Material Dealers, And Other Retailers... 167 Table 8-6 U.S. Floor Coverings Store Sales By Region And State, 2002-2011 (dollars)... 169 Table 8-7 Number Of U.S. Floor Coverings Stores By Region And State And Average Revenues Per Store, 2002-2011 (numbers and dollars)... 171 Table 8-8 Number Of U.S. Home Depot And Lowe s Home Centers And Lumber Liquidators Stores By State, 2007 And 2011 (number)... 173 Table 8-9 U.S. Floor Coverings Wholesaler (Distributor) Sales By Region And State, 2002-2011 (dollars)... 175 Table 8-10 Number Of U.S. Wholesaler (Distributor) Sales By Region And State And Average Revenues Per Store, 2002-2011 (number and dollars)... 177 Table 8-11 Revenues Of U.S. Floor Coverings Contractors By Region And State, 2002-2011 (dollars)... 179 Table 8-12 Number Of U.S. Floor Coverings Contractors By Region And State And Average Revenues Per Contractor, 2002-2011 (number and dollars)... 181 Table 8-13 U.S. Per Capita Income By State, 2007-2011 (dollars)... 184 Table 8-14 U.S. Existing Home Sales By Region, 2007-2012 (number)... 186 Table 8-15 New Privately Owned Housing Units Authorized By 20,000 Building Permit Places By Region And State, 2010-2012 (number)... 187 Report Number: FC079 Publication Date: September 2012 x