Floorcoverings Market Takes Tentative Steps in 2010

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Optimism is growing in the floorcoverings market in 2010 according to a new report from MTW Research, as sales of carpets, wood floorcoverings and ceramic floor tiles continue to stabilise in a number of key customer segments.

The recession of 2008 & 2009 cost the floorcoverings industry around £400 million according to MTW, with retailers and distributors rapidly reigning in their spending as a consumer ‘flight to price’ and postponement of domestic & commercial renovation projects ravaged the industry. With some product sectors experiencing sales declines of 20%, the floorcoverings market troughed in Q3, 2009 and would have experienced a greater contraction in sales if it were not for public sector spending underpinning the industry through schemes such as Building Schools for Future and Kickstart.

Despite a fragile recovery in consumer confidence, the proposed 25% cut in public sector spending is likely to dampen short term growth prospects for sales of floorcoverings. MTW also indicate that ‘…Growth forecasts remain subdued for the remainder of 2010 and H1 2011, with consumers’ discretionary spending thus far remaining lacklustre”. Despite this, the report identifies a number of key opportunities for growth in the floorcoverings market, highlighting scope for optimism within the carpets, wood and ceramic tile floorcovering sectors.

The report identifies a number of key product features & design trends likely to drive the market forward in 2010 & 2011, listing product benefits such as functionality, ease of installation and durability as offering retailers and manufacturers the opportunity to enhance the perceived value of their products. In terms of design trends, the research for the report found that floorcoverings which offer ‘tactile’ features are growing in popularity, alongside other key trends such as the use of bolder colours in moderation and the use of darker colours to create a more comforting environment.

The report includes a review of the share for each distribution channel and whilst the research found that the specialist retailers continue to dominate, this sector is continuing to lose share. During the last 12 months, MTW analysis of the retail industry sales found that whilst around 30% of floorcovering retailers experienced healthy rates of growth, almost 60% of the industry saw sales decline, highlighting the particularly difficult trading conditions in recent history. However, the research also found that more than 60% of the sector continues to boast healthy credit ratings, despite the drop in profitability in recent years.

A SWOT analysis of the floorcoverings industry undertaken by MTW identifies a number of ongoing strengths in the industry overall and illustrates a number of key areas where growth should prevail in the short to medium term. One such strength is indicated to be the relatively high levels of investment in manufacturing facilities by floorcoverings suppliers in recent years which should stand the industry in good stead to meet the anticipated rising level of demand in H2, 2010 and into 2011. The over-riding theme of the report is one of optimism for the future, particularly for those manufacturers and retailers who reacted quickly to the changing market demands of the last 2 years. The 220 page report is available from MTW Research’s website at www.marketresearchreports.co.uk or by calling 08456 524324 and is priced from £565.

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