Report indicates optimism in floorcoverings sector

A report by MTW Research has shown that optimism is growing in the floorcoverings market, as the sales of carpets, wood flooring and ceramic floor tiles continue to stabilise in key customer segments.

The 2008-09 recession cost the floorcoverings industry around GBP400m, according to MTW, with retailers and distributors rapidly reigning in their spending as a consumer 'flight to price' and with the postponement of domestic and commercial renovation projects negatively affecting the sector.

With some product sectors experiencing sales declines of 20 per cent, the floorcoverings market troughed in the third quarter of 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 the Future and Kickstart.

Despite a fragile recovery in consumer confidence, the proposed 25 per cent cut in public-sector spending is likely to dampen short-term growth prospects for the sales of floorcoverings.

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 MTW report highlights key product features and design trends likely to drive the market forward in 2010 and 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 that 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, while the research found that the specialist retailers continue to dominate, this sector is continuing to lose share.

During the last 12 months, MTW's analysis of retail industry sales found that while around 30 per cent of floorcovering retailers experienced healthy rates of growth, almost 60 per cent of the industry saw sales decline.

However, the research also found that more than 60 per cent continue to have 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 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 the second half of 2010 and into 2011.

The overriding theme of the report is one of optimism for the future, particularly for those manufacturers and retailers that reacted quickly to the changing market demands of the last two years.

The 220-page report is available from MTW Research and is priced from GBP565.

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