Rugs Overcome Pricing Challenges In 2012
May 9, 2012,
NEW YORK - Rug manufacturers and suppliers will likely look back at 2011 as a transitional year.
The overall industry managed a modest 2.7% sales increase to $25.7 billion, compared to 2010's $25.05 billion.
It wasn't an easy feat. Volatile raw material demand took a toll on production-related costs, and the recessionary environment nationwide kept shoppers guarded in spending on discretionary goods.
"[The] rug business improved in units shipped," Jeffrey Seagle, Mohawk's director of marketing and product merchandising told HTT. "Unfortunately, we have not seen an improvement in average price and total dollar sales as retailers continue to focus on value and opening price points."
2011 total retail sales: $4,530 million
up 3.0% from $4,400 million in 2010
Discount department stores
Home improvement centers
Home textiles specialty chains
Carpet/fl oorcovering stores
Gift/home accent stores & single-unit specialty textiles stores
|Discount department stores include Kmart, Shopko Stores, Target
|Direct-to-consumer includes television shopping channels, Internet
and catalog sales|
|Mid-price chains include JCPenney, Kohl’s, Mervyn’s, Meijer, Fred
Meyer, Sears, TJMaxx/Marshalls, Stein Mart and Ross Stores.|
|Home improvement centers include Home Depot and Lowes as well
as regional and local home improvement centers.|
|Variety/closeout includes stores such as Dollar General, Family
Dollar, Freds, Value City, Tuesday Morning and Big Lots.|
Other includes interior designers and military exchanges
Figures have been rounded. 2010 figures have been revised.
He added raw materials were absorbed by manufacturers for the most part, and a continued pressure "could force pricing up or product specifications down in 2012."
Oriental Weavers of America sees a lingering cautiousness from consumers about non-necessities. But that attitude stands to "help synthetic area rug manufacturers," explained Aaron Gray, OW's director of marketing. While retails of $299-$399 for 5-by-8 rugs are still important, "we are [also] seeing more consumers looking for rugs that at $199 retails and below."
An improving economy in some areas is also creating an opening for better-quality, better-priced soft floor coverings, according to Wade Maples, co-owner of Maples Rugs.
"Basically, it's about better goods that are made [using] more innovative constructions and are of a better quality so that we can sell them at a better price," he said.