Timber floors carpet

Summary
• Carpet’s UK floor coverings market share has fallen 12% since 2001.
• Wood and laminate’s market share has risen to 17% and total annual sales to £379m.
• Laminates have suffered worse than solid and engineered wood flooring in the recession.
• Engineered timber and solid annual sales in 2009 were £108m.

In 2008 some of the biggest names in the UK carpet sector stumped up £7m for a marketing campaign called “Fun on the Floor”. The reason? Because their share of the floor coverings market had slipped in eight years from 70% to 58%. The British had fallen out of love with carpet and the campaign aimed to reignite the flagging passion.

Sales of ceramics and vinyls have increased over this period, but the biggest factor in UK consumers’ desertion of wall-to-wall Wilton and shagpile have been their discovery of engineered timber flooring and laminates and rediscovery of solid wood. In 1995 all wood flooring combined accounted for just 2% of the floor coverings market. By 2007, says AMA, that had risen to 17%, making it a sector, including accessories, worth £379m a year.

Various factors are put forward for this change in floor covering culture. One is fashion, with the homestyle media raising the profile of hard flooring overall, and wood especially. Growing awareness about ‘healthy living environments’ is also thought to have contributed, with carpet accused of aggravating asthma by harbouring dust mites and leaching chemicals.

The sector, says AMA, was also boosted by the increase in the variety of wood flooring available, especially in laminates, plus the latter’s affordability.

Impact of recession

So has the inexorable advance continued through the recession? The short answer from the AMA report is no. Hit by the construction slump and declining consumer confidence, the total UK floor coverings market shrank from £2.2bn in 2007 to £1.96bn last year. Wood floor coverings sales were down too, falling 8% in 2008 and another 12% last year, which took the market down to £308m. This was actually a sharper decline than experienced in other hard flooring types and on a par with continuing shrinkage in carpet sales.

However, the pain was not equally spread through the wood flooring sector. According to AMA, laminates fared worst. They were most exposed to the slide in new house building and “experienced significant decline through the DIY sector”. Sales fell 10% in 2008 and 13% last year to around £173m. By contrast, solid and engineered wood flooring experienced a 2% decline in 2008 and 8% in 2009, taking total sales down to £108m.

AMA put the stronger performance down to the greater resilience to recession of the mid-to-higher end of the market. But the latest sales trend is also seen as a continuation of a longer-term shift, which has seen laminates’ share of wood floor coverings sales since 2004 fall from 70% to 60% and solid and engineered products’ rise from 22% to around 35%, with the balance taken by accessories.

Maturing market

Solid and engineered producer Junckers sees this as evidence of the market maturing.

“Everyone bought a laminate as it was trendy and something different to carpet,” said Junckers UK technical, sales and marketing manager Steve Maltby. “Prices fell and laminate was then seen as cheap. The next generation of buyers saw the limitation [of these products] and chose better [quality] engineered and solid boards.”

According to AMA, solid and engineered products have also been buoyed recently by their greater strength in contract markets, which have held up better than domestic in the downturn.

The total wood floor covering business is divided 42%/58% between contract and domestic sales. But for laminates that split changes to 31%/69% and for engineered and solid 62%/38% . And, states AMA, sales in the contract market shrank just 2% in each of 2008 and 2009, compared with the 8% and 12% of the whole wood floor coverings market.

Leisure and education sectors

According to Junckers, the leisure and education markets, where solid and engineered do well, has also been robust. “We’ve concentrated efforts away from the residential and retail markets, which are dominated by cheaper products, into sports and education,” said Mr Maltby. “And in 2009 we had one of our best years.”

According to manufacturers, the impact on flooring sales of the decline in new build has been offset to some extent by the improve not move phenomenon, with householders investing in their homes rather than sell them into a depressed market. Here, too, it is real wood engineered and solid flooring winning out.

“The quality and longevity of wood flooring makes it a popular choice for upgrading a property,” said Peter Keane, managing director of the solid and engineered supplier The Natural Wood Floor Company, “[It’s] a good investment and can help sell a property,” he said.

Engineered v solid wood

On the competition between solid and engineered flooring, of their combined market, the former accounts for 36% of sales by value, the latter 64%. Several suppliers thought this market divide had reached “equilibrium”, but others see further scope for further growth in engineered’s share.

“Interest in engineered boards is growing all the time as consumers become more educated about performance,” said Harvey Booth, Kährs UK sales manager.

Mr Keane agreed: “There will always be a place in the market for solid wood, but engineered has overtaken it. The most obvious factor for this is that it is more stable with underfloor heating and in areas which experience extremes in temperature, such as conservatories.”

“It’s not that solid wood can’t be used with underfloor heating,” said James Latham sales development director Paul Latham. “But it has to be installed with more care.”

Species

In terms of timber flooring species in the UK, one thing has remained constant; white oak is dominant, taking about 80% of the market, according to AMA.

“Oak continues to be universally adored and reigns as our best seller, especially 150mm, 160mm and 180mm solid premier grades,” said Mr Keane.

But this doesn’t mean flooring tastes are entirely unchanging. Lighter stains and finishes may still be the market leaders, but in recent years darker products have been making inroads. Hence Junckers’ introduction of darker brown and even black-stained oaks.

AMA says the taste for darker woods has also boosted sales of the UK’s second favourite solid wood floor, walnut.

“It has become a more prominent species and its popularity looks set to continue,” said Mr Keane. “The trend was initiated by the hospitality industry and retail, but it has now caught the public imagination.”

Tropical species flooring seems to remain very niche, although Decospan’s subsidiary Park-Ky, which specialises in veneered flooring, notes demand for wenge.

Meanwhile, at the lighter end of the spectrum the key sellers besides paler oaks, say producers, are ash, birch and beech with Latham’s also seeing a pick-up in demand recently for maple.

Another key trend is away from gloss, to matt varnishes and increasingly, given their added environmental hook, natural oil finishes. Character flooring, with more pronounced texture and natural variation is also said to be more popular, as are wide boards.

While enjoying continued strong demand for its three-strip engineered products, Kahrs sees the “less pocket-conscious, design-led” market opting increasingly for width and, as a result, has launched its Supreme Grande range.

Latham’s is also supplying wider products, although it cautions that they don’t suit every installation. “Big, wide boards are very macho, but they’re just too much for smaller modern properties,” said Mr Latham, “so we still see the mid-range 150/160mm product as our mainstay.”

Routes to market

Another area where the sector has evolved in recent years has been in its routes to market. Once the preserve of specialist retailers/installers, timber floors are now sell via a range of outlets. According to AMA, the biggest players are DIY and floor covering multiples, with 28% and 20% of the market respectively. Furniture multiples have 7%, department stores 4%, mail order 3% and hardware stores, the internet and other routes 10%. One supplier criticised the merchant sector for not maximising market opportunities and focusing on the bargain-basement end of the business, but others said it remains a key channel across the price spectrum, particularly to the small to medium builder and installer markets. According to AMA it still accounts for 19% of the wood floor coverings sector – and Lathams, which numbers merchants among its key customers, reports its sales last year up 28%.

For the year ahead, the AMA predicts that continued fragility in the housing market and a slowdown in contract work, will make the going tough for the floor coverings business as a whole, with a further 2% contraction in sales. Wood floor coverings won’t find life easy either, but while laminate sales are expected to slip another 6%, engineered and solid are predicted to start growing again, albeit by just 1%. The total wood flooring sector is then expected to return to positive figures in 2011, and by 2013 to be growing at 3% annually. For the longer term future, the market conviction is that UK consumers’ taste for hard flooring generally and timber flooring in particular has become a fixture and that, despite its massive promotional spend, the carpet sector is set to have even less ‘fun on the floor’ than it is now.

• For more on AMA’s new Wood/Laminate Floor Coverings Report go to www.amaresearch.co.uk or call 01242 235724.