What issues are retailers most concerned about?
Many independent retailers are on pace for record revenues in 2022. However, it has not been done without hardship in the form of worker shortages, a global supply chain slowdown and soaring inflation that has muted even the best of years for dealers. So, what are dealers most concerned about in the new year? Here are a few responses.
What concerns me most is falling into a negativity trap. We need to remain positive—make the best of a situation and set the proper expectations; expect the best from ourselves, our family and our employees. Together we can work through this shipping crisis and so much more. Inflation is here for the immediate future and we can expect more price increases on everyday items like gas, groceries, dining out and flooring, in particular. The big elephant in the room is gas prices and it’s a psychological outlier; people don’t respond well to gas hikes. I tell my members to look at price increases like a pay raise. They just raised their sales volume by 25% over the past year with the five increases without installing one additional yard of carpet. The RSA just got a raise, too. A $2,000 order is now a $2,500 order. Bottom line: this is a tax on the consumer. The manufacturer passes it on to the retailer and the retailer passes it on to the consumer.
– Olga Robertson, FCA Network Shorewood, Ill.
Supply chain issues. Without materials we can’t generate revenue. We have been fortunate to have reasonable back orders in comparison to some industries, or at least enough supply in general that there is another option that may solve the problem. We are fortunate to have plenty of warehouse space and have plenty of inventory. We focus now on having shelves completely full to help protect from hiccups in the supply chain.
– Ben Case, The Carpet Collection Lockport, NY
I am most worried about employee burnout. As a society, we have been under tremendous pressure since the beginning of 2020 for so many different reasons. This general angst coupled with the present demands of the global economy—whether it is challenges from the supply chain, etc.—has translated into employee burnout as well as myriad other issues. It is harder than ever to keep employees retained, engaged and happy—not to mention attract new employees. I keep hearing about the so-called ‘Great Resignation’ and I can’t help but agree. No matter what type of business you own or run right now, you are probably facing this key challenge.
—Lauren Voit, Great Western Flooring Naperville, Ill.
Inflation is a great concern as we have not seen this level since 1991. For prices to come down we are going to have to see the demand go down, which is unfortunate as this is one of the greatest periods selling flooring. Fortunately, we continue to look for great buys of stylish products and keep our costs competitive to offer a great deal to the consumer. We may not be able to do much about inflation, but we can be smart in our offering to the consumer and give them reasons to buy from us.
– Carlton Billingsley, Floors and More Benton, Ark.
Supply chain disruptions are aggravating, but not nearly so much as the near constant price increases that are far more miserable to process and endure. Repricing the sales floor is expensive and disruptive. The new ‘surcharge’ element from vendors is a cancer. Inflation is definitely a significant negative factor in several ways. Aside from the obvious general negative characteristics of inflation that affect everyone, there are more industry-specific ones to deal with as well. On one hand, higher prices at cost do drive larger dollar volume contribution and greater profit if margins are maintained. However, products that are selected to address specific price points to the consumer are now no longer viable. Also, if whole categories continue to rise to the point that customers are persuaded to choose lesser quality products, the whole value proposition that we deliver will be negatively impacted.
– Sam Roberts, Roberts Carpet & Fine Floors Houston
The supply chain impacts our business more than any other issue. Back orders, delays, price increases, etc.—we’re all dealing with it. We’ve worked hard to manage customer expectations and provide alternatives (ie, in-stock selections or lower-priced products). This presents an opportunity to differentiate ourselves from the big boxes and truly act as ‘sales advisors.’
—Adam Joss, The Vertical Connection Carpet One Floor & Home Columbia, Md.
Supply chain issues are obviously affecting everyone. It’s not just us flooring retailers waiting to get materials; it’s all the trades trying to get materials, which is creating a bottleneck. Builders want to get the houses done quickly, and yet at the end of the job we don’t have the installers. So many stops and starts. You dream to have business like this [with so much activity]. If we could just get the supplies, we could make more money. So, from that standpoint, it’s disappointing that we can’t take advantage of this situation more.