Carpets and Floorcoverings - UK - May 2011

INTRODUCTION
Definitions
Abbreviations
EXECUTIVE SUMMARY
The market
Figure 1: Consumer spending on carpets and floorcoverings, 2005-15
Weak market conditions prevail
Carpets two thirds of spending
Figure 2: Consumer spending on flooring products, by category, 2010
Market factors
Slowdown in house moves depresses demand
Figure 3: Number of UK residential property transactions, seasonally adjusted, by quarter, 2006-11
More households but smaller dwellings
Growth in 25-34 age band positive for sales
Lower interest in the home
Companies, brands and innovation
Manufacturing fragmented
Innovation influenced by style, technology and environmental issues
Retail distribution
Figure 4: UK retail sales of carpets and smooth floorcoverings, by outlet type, 2008 and 2010
Carpetright is the largest specialist
Small advertising support
The consumer
Fewer consumers buying carpets and floorcoverings
Figure 5: Number of households purchasing carpets, wooden floors and other floorcoverings/tiles, 2006-10
Price-savvy customers shop around
Ownership of flooring
Figure 6: Types of flooring, by room, selected rooms, April 2011
Choice dominated by practicalities
What we think
ISSUES IN THE MARKET
Has the reduced level of housing transactions in the UK had a direct impact on demand for carpets and floorcoverings?
Raw material prices are rising, along with other operating costs, but are consumers resistant to paying higher prices?
Is online browsing and buying having an impact on sales of carpets and floorcoverings?
Are environmental concerns shaping consumer choice of carpets and floorcoverings?
As more people buy flats and apartments how will this affect demand for carpets and floorcoverings?
FUTURE OPPORTUNITIES
Trend: Home as a Pension
Trend: Trial Without Error
INTERNAL MARKET ENVIRONMENT
Key points
Evidence of waning interest in the home
Figure 7: Attitudes towards the home, 2006-10
Dust mites and asthma
Figure 8: Allergies prone to, 2006-10
Prices of carpets and other floor coverings are on the rise
Figure 9: Annual change in consumer prices for carpets and other floorcoverings, Jan 2008-Dec 10
Overseas trade
Figure 10: Overseas trade in carpets and other floorcoverings, 2006-10
Figure 11: Carpet/floor coverings Import sources, 2006-10
Noise nuisance with hard floors
Environmental concerns
Fashion trends
BROADER MARKET ENVIRONMENT
Key points
Hard times boost savings ratio
Figure 12: GDP, PDI, consumer expenditure and savings, at current prices, 2005-15
Slow housing market
Figure 13: Number of UK residential property transactions, seasonally adjusted, by quarter, 2006-11
Consumer confidence
Figure 14: Trends in statements relating to the economic downturn, April 2011 and February 2009
Growing number of UK households
Figure 15: UK households, by size, 2005-15
Population structure is changing
Figure 16: Trends in the age structure of the UK population, 2005-15
Upwardly mobile population
Figure 17: Forecast adult population trends, by socio-economic group, 2005-15
COMPETITIVE CONTEXT
Key points
The market for carpets and floorcoverings in context
Figure 18: UK retail value sales of competitive markets, 2006-10
How retail has fared
Figure 19: Comparison of retail sales, at current prices (non-seasonally adjusted), 2006-10
Figure 20: Comparison of annual quarterly changes in retail sales, by category, at current prices (non-seasonally adjusted), 2007-10
Consumer spending priorities
Figure 21: Expenditure priorities, 2007-10
STRENGTHS AND WEAKNESSES IN THE MARKET
Strengths
Weaknesses
WHO’S INNOVATING?
Key points
Digital printing brings realistic look to laminate
Sustainability moves up the agenda
Cutting noise problems in homes
New materials and easier cleaning
Focusing on key trends and customisation
Plenty of new releases and new products
MARKET SIZE AND SEGMENTATION
Key points
Weak demand leads to challenging market conditions
Figure 22: UK retail value sales of carpets and floorcoverings, 2006-15
Segment performance
Figure 23: UK retail value of carpets and flooring by segment, 2006-10
Forecast
Figure 24: Consumer spending on carpets and floorcoverings, 2005-15
COMPANIES AND PRODUCTS
 MAJOR PLAYERS
Axminster Carpets
Figure 25: Financial performance of Axminster Carpets Ltd, 2008 and 2009
Brintons
Figure 26: Financial performance of Brintons Ltd, 2008 and 2009
Cormar Carpets
Figure 27: Financial performance of Greenwood & Coope Ltd, 2008 and 2009
Forbo Flooring
Figure 28: Financial performance of Forbo Flooring UK Ltd, 2008 and 2009
Kronospan
Figure 29: Financial performance of Kronospan Holdings Ltd, 2008-09
Ulster Carpets
Figure 30: Financial performance of Ulster Carpet Mills (Holdings) Ltd, 2009 and 2010
Unilin
Figure 31: Financial performance of Mohawk Industries Inc, 2008 and 2009
Figure 32: Financial performance of Unilin, 2008 and 2009
Victoria Carpets
Figure 33: Financial performance of Victoria Plc, 2009 and 2010
Figure 34: Six months financial performance of Victoria Plc, 2009 and 2010
Other carpet manufacturers
Figure 35: Selected other companies in the floorcoverings market, February 2011
CHANNELS TO MARKET
Key points
Independents dominate
Figure 36: UK retail sales of carpets and smooth floorcoverings, by outlet type, 2008-10
This is a market for specialists
Independents losing share
Carpetright forges ahead with e-commerce
Repositioning of a smaller Allied Carpets
Smooth flooring specialists
DIY sheds stronger in smooth flooring
Department stores cushioned
Headlam leading supplier to independents
Expanding internet presence
BRAND COMMUNICATION AND PROMOTION
Key points
Overall advertising spend is down
Figure 37: Main media advertising expenditure – carpets & soft floorcoverings, and hard flooring, 2007-10
Carpetright dominates spend
Figure 38: Main media advertising expenditure on carpets and soft floorcoverings, and hard flooring, by advertiser, 2007-10
Press advertising takes the lion’s share
Figure 39: Main media advertising expenditure on carpets & soft floorcoverings, and hard flooring, by media type, 2007-10
Autumn boost for advertisers
Figure 40: Average monthly spending on main media advertising on carpets & soft floorcoverings, and hard flooring, 2007-10
Fun on the floor
THE CONSUMER – OWNERSHIP AND PURCHASING PATTERNS
Key points
Slump in numbers making purchases
Figure 41: Ownership and purchasing of carpets, wooden floors and other floorcoverings/tiles, 2006-10
Figure 42: Number of households purchasing carpets, wooden floors and other floorcoverings/tiles, 2006-10
Figure 43: Purchasing of carpets, by socio-economic group, 2010
Five-year cool-down in demand for smooth floors
Figure 44: Purchasing of wooden floors, by lifestage, 2010
Figure 45: Purchasing of other floorcoverings/tiles, by age, 2010
Types of flooring in home
Figure 46: Types of flooring in home, April 2011
Types of flooring by room
Figure 47: Types of flooring by room, April 2011
Carpets dominate living space
A quarter of 25-44s have laminates in the lounge
Smooths for kitchens and bathrooms
Wood appeals to younger customers
Figure 48: Ownership of vinyl, wood and rugs, by age, April 2011
THE CONSUMER – FACTORS INFLUENCING CHOICE
Key points
 FACTORS INFLUENCING CHOICE OF CARPETS
Figure 49: Any factors important in choice of carpets, April 2011
Figure 50: Factors important in choice of carpets, April 2011
Getting the right deal
Easy care
Guarantee of durability
Free fitting is a draw
They want to touch and feel
See it at home first
Weave and tuft
Blank canvas
What triggers a new purchase?
Consumers appear unconcerned about environmental factors
 FACTORS INFLUENCING CHOICE OF SMOOTH FLOORING
Figure 51: Factors considered important in choice of hard/smooth flooring, April 2011
Figure 52: Factors considered important in choice of hard/smooth flooring, April 2011
Smooth floors easy to clean
Guarantees really matter
Price and special deals
Fit it yourself?
Low interest in environmental factors
CONSUMER – ATTITUDES TOWARDS BUYING CARPETS/FLOORCOVERINGS
Key points
Attitudes towards buying carpets and floorcoverings
Figure 53: Attitudes towards buying carpets/floorcoverings, April 2011
Carpets and floorcoverings as part of the decor
Getting the right price
Buying to last
Seeking good advice
Older shoppers prefer independents
Will they buy online?
 CLUSTER ANALYSIS
Figure 54: Customer typologies for carpets and floorcoverings, April 2011
Indifferent (37%)
Who are they?
What influences them?
Figure 55: Factors influencing choice of carpets, by customer type, indifferent, April 2011
Figure 56: Factors influencing choice of smooth flooring, by customer type, indifferent, April 2011
Decorators (24%)
Who are they?
What influences them?
Figure 57: Factors influencing choice of carpets, by customer type, decorators, April 2011
Figure 58: Factors influencing choice of smooth flooring, by customer type, decorators, April 2011
Quality seekers (21%)
Who are they?
What influences them?
Figure 59: Factors influencing choice of carpets, by customer type, quality seekers, April 2011
Figure 60: Factors influencing choice of smooth flooring, by customer type, quality seekers, April 2011
Online researchers (19%)
Who are they?
What influences them?
Figure 61: Factors influencing choice of carpets, by customer type, online researchers, April 2011
Figure 62: Factors influencing choice of smooth flooring, by customer type, online researchers, April 2011
APPENDIX – THE CONSUMER – OWNERSHIP AND PURCHASING PATTERNS
Figure 63: Types of flooring, by demographics, April 2011
Figure 64: Types of flooring in ‘Lounge/Sitting room’, by demographics, April 2011
Figure 65: Types of flooring in ‘Dining room’, by demographics, April 2011
Figure 66: Types of flooring in ‘Kitchen’, by demographics, April 2011
Figure 67: Types of flooring in ‘Bedroom 1’, by demographics, April 2011
Figure 68: Types of flooring in ‘Bedroom 2’, by demographics, April 2011
Figure 69: Types of flooring in ‘Bedroom 3’, by demographics, April 2011
Figure 70: Types of flooring in ‘Bedroom 4’, by demographics, April 2011
Figure 71: Types of flooring in ‘Bathroom 1’, by demographics, April 2011
Figure 72: Types of flooring in ‘Hall/Stairs’, by demographics, April 2011
Figure 73: Types of flooring in ‘Study/Home office’, by demographics, April 2011
APPENDIX – THE CONSUMER – FACTORS INFLUENCING CHOICE
Figure 74: Factors considered important in choice of hard/smooth flooring, by most popular attitudes towards buying carpets/floorcoverings, April 2011
Figure 75: Factors considered important in choice of hard/smooth flooring, by next most popular attitudes towards buying carpets/floorcoverings, April 2011
Figure 76: Factors considered important in choice of hard/smooth flooring, by other attitudes towards buying carpets/floorcoverings, April 2011
Figure 78: Factors considered important in choosing carpets, by least popular factors, by demographics, March 2011
Figure 79: Factors considered important in choosing of hard/smooth flooring, most popular factors, by demographics, March 2011
Figure 80: Factors considered important in choosing of hard/smooth flooring, next five factors, by demographics, March 2011
APPENDIX – ATTITUDES TOWARDS BUYING CARPETS/FLOORCOVERINGS
Figure 81: Most popular attitudes towards buying carpets/floorcoverings, by demographics, March 2011
Figure 82: Next most popular attitudes towards buying carpets/floorcoverings, by demographics, March 2011
Figure 83: Other attitudes towards buying carpets/floorcoverings, by demographics, March 2011
Figure 84: Target groups, by demographics, March 2011
Cluster analysis
Figure 85: Attitudes towards buying carpets/floorcoverings, by target groups, April 2011
Figure 86: Types of flooring by room, by target groups, April 2011
Figure 87: Factors important in choice of carpets, by target groups, April 2011
Figure 88: Factors considered important in choice of hard/smooth flooring, by target groups, April 2011