Carpet: State of the Industry 2021
By Ken Ryan SSince the second quarter of 2020, the residential carpet segment has performed strongly in the LVT category, with strong double-digit gains. While that level of performance may not be new to LVT, it’s a bold headline for carpet — a category that had previously lost market share while scurrying around with little to no annual gains.
Thanks in large part to COVID-19, which ushered in the work-at-home environment, carpet is making a comeback, with home sales up 54% in the second quarter of 2021 from the same period last year, according to estimates from the industry. To be fair, the second quarter of 2020 was terrible for carpet amid the dark days of the pandemic. Since that low water mark, residential carpet sales have skyrocketed; According to industry figures, the housing market is up 36% so far from the same period last year, marking four consecutive quarters of growth – an increase not seen since before the Great Recession.
Like any other floor segment, the fortune of carpet is tied to housing. And while not all statistics point to housing, there are two statistics that are single-family and multi-family. The start of single-family homes in August was a seasonally adjusted annual rate of 1.6 million, the US Census Bureau and the US Department of Housing and Urban Development jointly announced. That’s 3.9% above the revised July estimate of 1.54 million and 17.4% above the August 2020 rate of 1.376 million. Multi-family starts up 20.6% in August to an annual rate of 539,000 units, the highest rate for multi-family since January 2020.
“All these elements are designed to help [carpet] showing such a positive trend,” said Curt Hutchins, president of Mohawk’s residential carpet business. “The industry has been on a very positive upward trajectory since the second quarter of 2020. COVID-19 kept people in their homes and pushed them to do things they put off. I think the reality of living and working in your home every day has also played an important factor.”
During the pandemic, discretionary funds normally earmarked for travel and entertainment were funneled into residential home improvements, and carpet received some of that spending. “Spending more time at home meant a greater desire to create a space where multiple people could work from home, learn from home, and most importantly, feel comfortable at home,” said Christine Zampaglione, senior marketing director for Stanton. “The need for sound absorption is also unprecedented, and carpet definitely helps reduce noise from room to room.”
With carpet enjoying the thin air of double-digit increases, the question many have pondered is: can it continue in the long run or at least after COVID-19? One thing to remember, the executives note, is that today’s carpet is much better than the products that were introduced just five years ago.
“The reality is that factories today make better carpet with performance features that make it a viable option for the entire household,” said Joe Young, soft surfaces category manager for Engineered Floors. “Solution dyed alleviates the age-old fear of carpet stains, fading or fading in a short time. “Solution-dyed carpets also offer more mixed multi-colors that transition visually smoothly from a hard surface to a soft surface. These performance and aesthetic improvements only add to the underfoot comfort that people have always loved about carpet.”
Some observers expect carpet volume to at least remain at current levels in 2022. “As the overall flooring market is growing, we still think that hard surfaces will grow faster than soft, but we think the level we’re at for carpet is a pretty good level,” said Mohawk’s Hutchins. “We expect a decline in retail, but a decline in multi-family homes. I don’t see anything significant to change that. Foot traffic is still great. It won’t stay that way forever, so it’s our duty to keep our new keep products innovative and abreast of fashion trends as there has been a significant rise in the more expensive carpet.”
Indeed, where carpet has done well is on the higher side, with wholesale prices starting at $15 and up. Studies have shown that homeowners no longer buy carpet for their entire home; it is usually room by room. Therefore, they are willing to pay more for it. For example, the Dixie Group’s primary fiber is nylon 6.6, with an average price about three times the industry average, according to TM Nuckols, president of TDG’s residential division. “We design and make products that can command that premium, and the durability of Nylon 6.6 is a big part of that equation,” he explained.
Higher prices have also been helped by the multi-family segment, which artificially improved the net sales price of carpet as tenants stayed longer in their apartments during COVID-19, resulting in fewer turns. As a result, factories sold goods at higher average selling prices as opposed to the cheaper carpet normally used in multi-family homes.
The encouraging takeaway for factories and their retail partners is that consumers are willing to give carpet a second chance after years of opting for hard surfaces. “As an industry, we are excited about the category from a long-term perspective,” said Brad Christensen, director of category management for soft surfaces, Shaw Residential. “There is a lot of optimism in the category right now and everyone is enjoying the lift and the goodness. The more people talk about soft surface, the more new buyers realize there are things that can improve their lifestyle.”
Rising costs in raw materials, logistics and labor have led to multiple price increases in carpet and other categories. That trend is expected to continue. However, executives such as Carole Shealy, director of marketing and product development for Tarkett, noted that while carpet costs have increased, they have not increased as much as other product categories. As such, “Carpet will continue to be an excellent value for consumers,” she said.
Shaw’s Christensen said he is more concerned about the disruption the price increases have caused to its retail customers and the end user. “All consumer products are affected by this macro-inflationary period. A beautiful product combined with a well-articulated and simple performance message will win the day, even in a period of rising costs. Studies show that the post-pandemic consumer values sustainability and longevity of investments much higher than before, followed by factors such as cleanability.”
Mohawk is among a number of top factories that are making significant investments in manufacturing capacity that supports the loops and fashion products that are so popular today. In particular, Modern View and Enchanting Flair, a Karastan SmartStrand Silk, and Karastan Kashmere, with a medallion pattern, have gained a lot of popularity in 2021.
Tarkett has five new product offerings featuring luxury designs, including Papyrus’ textured weave style, Presidio’s plain weave linen look and Somerset’s art deco layered diamonds. “Our new designs bring dimension and attention to any room,” says Shealy of Tarkett.
Three new styles of the Rock Fusion collection were recently introduced for Stanton. The new styles are fashionable choices that add a designer look to any space, the company said.
Shaw said it hopes to differentiate itself from the plethora of industrial pet messaging products with its pet-friendly innovations, including Shaw’s R2X stain and dirt treatment, ColorGuard technology that resists fading and LifeGuard spill-resistant backing.
New from DW Select, the residential brand of Engineered Floors, is Coastal Escape. This small-scale artistic pattern complements contemporary or traditional styling with a subtly striped color palette.