Periodical

July 23/30, 2012
Laminate
19
Flatline: 2011 highs, lows
By Raymond Pina
The U.S. laminate floor wholesale market
essentially remained flat in 2011, growing
just 0.13 percent in value due to rising prices
while declining 0.82 percent in volume,
according to Catalina Research.
The category’s wholesale value and average
square foot pricing stopped declining, and
domestic products overtook imports for the
first time since 2008. But sales volume was
dominated by the home center channel and
continues to decline due to pressure from
vinyl and engineered wood flooring. What’s
more, this trend is continuing through 2012,
according to Stuart Hirschhorn, director of
research, Catalina Research.
Chart 21
Laminate purchases by
end-use market
(Total: $894.2 million)
Chart 22
Laminate flooring market value and volume
(in millions)
1,400
1,200
1,000
800
600
400
200
7.5%
$1,275.6(R)
12.2%
Residential replacement
$718.0 million
Residential builders
$67.1 million
Commercial replacement
$109.1 million
1,160.2(R)
$1,047(R)
80.3%
Source: Catalina Research
1,038.9(R)
$901(R)
Market sales
“Overall demand for laminate flooring
has leveled off,” Hirschhorn said. “The
gains of domestic shipments were offset by
declines in imports last year. We do see an
estimated 1.5 percent increase in the first
half of 2012 but that will keep the category
well within the 950 million to 960 million
square foot range.”
Catalina estimated the 2011 U.S. laminate
floor wholesale market at 949.8 million square
feet and $894.2 million with an average square
foot price increase of 1.1 percent to 94 cents.
Domestic rising
While Catalina reports an aggressive
13.8 percent increase in sales volume for
domestically-made laminate product in
2011, overall category growth was stalled by
a 13 percent decline in imported product,
according to Hirschhorn.
“It’s been like a rollercoaster where
imports will out-pace domestics one year and
then it flip flops the next — though there’s
definitely a shift towards sourcing domestic
2011 key points
Laminate sales remain virtually flat in
2011, growing 0.13 percent in value and
declining 0.82 percent in volume.
Average square foot pricing rose 1.1
percent in 2011, though pricing was off
14.5 percent from 2007 and 53 percent
from 1997.
Domestic suppliers account for 51.2
percent of U.S. square footage sales, a
leading position not enjoyed since 2008.
Laminate has lost 9.1 percent of market
share since 2007.
912
$893(R)
2007 2008 2009 2010 2011
Square feet
957.7(R)
$894.2
949.8
Source: Catalina Research
R=Revised
Chart 23
Laminate flooring imports value and volume
(in millions)
600
500
400
300
200
100
0
$589.7(R)
550.0
$453.2(R)
461.9
Market sales
products to offset rising import prices and
increasing transportation costs,” he said.
As a result, Hirschhorn said U.S. laminate
floor manufactured shipments now account
for 51.2 percent of U.S. sales volume.
“There’s a paradigm shift from outsourcing
to insourcing happening in flooring,
especially in laminate flooring,” said Tony
Sturrus, president and CEO of Shippenville,
Pa.-based Clarion Industries. “This rapid
shift is primarily being driven by the shrinking
cost advantage China has versus the U.S.
Labor is a relatively small component of the
highly automated laminate manufacturing
process so that Chinese advantage has little
impact. China’s manufacturing costs are
going up and they’ve devalued their currency
but it’s not sustainable.”
The home centers, pricing pressure
Though domestic suppliers are taking
share, it hasn’t had an impact on average
square foot pricing because an estimated
60 percent of product is sold at low-cost
mass merchants such as Home Depot,
Lowe’s and Lumber Liquidators, according
to Catalina Research. While average square
foot pricing increased by 1.1 percent last
year due to increased raw material and
transportation costs, it remained down
14.5 percent from 2007 and a whopping 53
percent from 1997.
Catalina Research estimates laminate
floor sales represent 5.0 percent of the
industry’s total 2011 value, a 2 percent
decline from 2010 and a 9.1 percent
decrease from 2007.
However, laminate suppliers focused on
the specialty retail market said that average
pricing is increasing as dealers turn to better
quality goods.
“The better dealers have learned it’s not
worth the effort to try and compete against
home centers on pricing,” said Dan Natkin,
director of wood and laminate business,
Mannington. “They may have one or two
products at an attractive opening price
$461.9(R)
486.0(R)
$476.2(R)
Square feet
522.7(R)
$419.2
2007 2008 2009 2010 2011
Chart 24
454.8
Source: Catalina Research
R=Revised
Laminate flooring average
value per square foot
$1.20
$1.00
$0.80
$0.60
$0.40
$0.20
$0.0
$1.10
$1.01
$0.99
$0.93(R)
$0.94
2007 2008 2009 2010 2011
Source: Catalina Research
R=Revised
point, but their emphasis, and what their
customers are increasingly buying, are
thicker products with better quality and
overall design.”
Fred Giuggio, vice president of sales and
marketing at Kronotex USA, said average
price points are increasing in both the specialty
retail Formica brand business as well
as in private label business at Home Depot
and Lowe’s.
“The shift to domestic product has
increased quality and we’re seeing a subsequent
uptick in sales price,” he said.
Armstrong raised its laminate floor pricing
5 percent last month, but currently other
leading suppliers haven’t followed suit.
An increase in price wo n’t stick, said
David Carballo, vice president of sales, Faus.
“We just had a product line review at Home
Depot and these guys are putting a lot of
pressure on price,” he said. “Lumber Liquidators
is advertising price like crazy.” FCW