New year revelations. What's new in '22...
After the unprecedented twists and turns of the last two years, it’s either brave or foolish to predict the prospects for 2022 – but let’s chance it anyway and check out what’s new for the months ahead!
Read our predictions and also commentary from business leaders on prospects:
- Trends in the market
- Financial prospects - see the second part of this article below.
NEW PRODUCTS BOOST COMPETITION
Product launches held back by the pandemic are finally coming through, and coming through strongly as companies have had time to fine tune their portfolios and enter the more competitive era ahead with well-thought-through offers.
In carpets, it’s the quality end of the market that will see greatest growth in 2022 with the wool sector doing well, underpinned by the continuing appetite for all flavours of wool loop, and in man-made, a clear shift towards polyester and polyamide ranges, notwithstanding the ongoing rises in the price of fibre.
Our photo top left shows one of the new 2022 designs from bespoke carpet edging specialists Nicola Edwards,
At the other end of the market, many retailers have increased their roll offers, taking comfort from the ability to manage some of their own stock levels in uncertain times and also catering for entry-level business for hard-pressed consumers dealing with cost of living increases.
“Hard flooring will continue to take a good share of the m2, with herringbone staying on trend. Carpet manufacturers are reacting to an interest in strong warm colours and isometric and plaid patterns. The discerning buyer is looking for inspiration, and the supplier/retailer that offers ‘more than grey’ will be able to capitalise on that.”
Mike Reed, Head of Group Operations, SMG
In style, plain greige inevitably dominates and some greys have warmed up to be more beige, but a little more colour is coming through in greens and reds while blues are the most popular alternative choice. The official colour for 2022 by the way is Very Peri Blue according to hue gurus Pantone – a vibrant, warm blue.
For the smooths sector, many main players have re-vamped their ranges to offer a smaller, better choice. Parquet predominates and is the driving force of the LVT market with paler, greyer tones adding to the trend.
BRAND NEW BRANDS
The leading brands in our sector are looking better than ever. And retailers will benefit.
Marketing departments who had less products to launch in 2020-21, have instead overhauled their approach and appearance to the market with lots of intelligent re-positioning, creative polishing and more coherent propositions for consumers
.Key companies like Furlong, Associated Weavers, Victoria, Kellars and Abingdon have re-invented their portfolios to make one-stop shopping easier across all flooring products. Thoughtful new branding with increased consumer appeal has been introduced by companies like Cavalier, Hugh Mackay’s Q-floors and Kingsmead
GREEN GRABS THE AGENDA
Environment credentials have moved quickly from “nice to have” to essential sales imperative in 2022 as the flooring sector has done well to keep in step with increasing consumer awareness.
The now widespread acceptance of climate change and its enhanced profile after COP26 in Glasgow have upped the stakes and intelligent eco initiatives by flooring manufacturers, especially in recycling and recyclability, are everywhere.
Omicron set to dictate the sales profile for months ahead
MARKET ANALYSIS
The financial prospects of the flooring market continue to be dependent on the course of the pandemic. Most businesses in our sector are up on pre-Covid trading, despite all the challenges, because middle-class consumers have sustained all or most of their income and have invested in their homes while other indulgences have been denied them.
Logically, sales growth will slow as much of the unspent savings have been spent by now and consumers anticipate more opportunities in 2022 to finally blow their cash on holidays, restaurants and socialising. Then came Omicron.
As a result, the first quarter of 2022 is likely to be buoyant as the flooring trade continues to work through order backlogs and the second quarter could be strong if Omicron means consumers are still hesitant to make forward bookings on leisure.
The threat of rising inflation cuts both ways. Disposable income is reduced but the pressure to buy now before it goes up is increased. House sales with new carpets may slow if mortgage rates rise, but those put off moving may invest more in their current home.
Inflation within the industry and cost increases from suppliers means some of the earlier opportunities for margin improvement by retailers has been eroded as increase costs have to be passed on. But overall, 2022 could still be up on 2019 for the flooring sector.
“Predictions are difficult as we try to juggle with the different aspects of rising costs, inflationary pressure, Covid and consumer demand. What I would say is that service is king and colour and texture are coming back
so it will be an interesting time!”
Martin Peace, Sales Director, Abingdon Flooring
“Although there is much uncertainty, there does appear to be sufficient projects in the pipeline to carry retailers through to the end of the second quarter. Beyond this very much depends on Covid 19 and the ability for consumers to be able to spend on travel and social events rather than home improvements.”
Jon Richardson, Group Development Manager, ACG
“These times have been uncharted waters for all.
The high level of trading during late 2020 and 2021 have surprised both suppliers and retailers alike and I expect it to continue in Q1. But then it might decline to a little below 2019 figures.”
Mike Reed, Head of Group Operations, SMG
STOCK AND AVAILABILITY
If 2021 was relatively positive for profit, it was another story for availability, with multiple challenges across the supply chain. Delivery delays have changed the buying habits of some retailers who took the opportunity (or were forced) to review their supplier roster and shift allegiances. As 2022 gets started, the situation is beginning to normalise in terms of service but not on cost – shipping fees are still at historically high levels and likely to remain so for most of the year ahead. UK-based businesses will continue to gain some advantage from this situation in the short term, although imports of fibre has been a constraint even for them.
Suppliers who were able to maintain high stock and maintain reasonable service levels – and give their retailers accurate and pragmatic data in the thick of it – will be rewarded with enduring loyalty
