May 2, 2022
I had the opportunity to attend the American Home Surfaces Group and Commercial USA national convention at the Gaylord Opryland in Nashville, Tennessee. Combined, the groups have more than 600 members and 770 showrooms accounting for $2.5 billion in sales, according to Bruce Weber, AHSG and Commercial USA president.
Weber said that during the pandemic the group’s residential remodel/replacement and new home business grew 30% while the group’s commercial business grew 20%, namely in hospitality, corporate and medical.
At the event, the group unveiled a new division, American Kitchen and Bath Affiliation (AKBA), which introduces a marketing strategy that helps dealers connect with National Kitchen and Bath Association members at a local level.
Pamela McNally, vice president of marketing, NKBA, told dealers at the convention that they have major opportunities to grow their business by offering kitchen and bath services: “People are spending more time at home, but they’re also saying, ‘Okay, this is my forever home.’ Guess what? They don’t mind spending a little bit more to get what they want.”
She said millennials are currently the bigger buying segment and technology is increasingly important in their buying decisions: “Here’s the thing that I really truly believe in: hyperlocal. I try to buy local as much as I can, so I feel like that trend is becoming more and more prevalent even for modelers and designing designers, especially with artisan and products. Everybody wants some sort of personalized outreach.”
The opportunity in kitchen and bath is echoed by AHSG and Commercial USA membership.
“Last year we had a tremendous year—we grew about 20%,” said Donny Phillips, president, Atlanta Flooring Design Centers, based in Suwanee, Georgia, serving 11 locations in the southeastern United States. “Just this last March we had our largest month we’ve ever had in 36 years. That was lined up because we had several big commercial jobs that were booked in March, several builder jobs, and our cabinet division grew a lot. Add to that our custom build and retail. Frankly, all five divisions we hit on every cylinder. For the year, it could slow down a little bit, so conservatively, I’m looking at five to 10 percent growth.”
Kitchen and bath is big business, and we’re seeing it reflected in our reader’s interest as well. Going forward, plan to see more content about trends and surfaces in these spaces, including countertops and tile.
While AHSG and Commercial USA dealers are flush with opportunity, the challenges they face are the same as others in the industry: supply chain issues, rising inflation and the availability of qualified floorcovering installers.
“We could grow our business a lot more if we were comfortable with the labor market,” said Tim Hightower, owner and president, Southern Hardwood, Carpet & Tile in Birmingham, Alabama. “Right now, we see price increases every week. If you’re in commercial contract work and you don’t move quick, it could cost you a lot of money. I’ve got a saying: ‘Stay worried to keep from getting worried,’ so I’m thinking six months, a year from now. 2023? I’m worried about potential recessions.”
“I think we can probably outsell the amount we can get installed—we have more business than we can get down,” said Chuck Short, vice president supply chain, Arbor Contract, which has 16 locations coast to coast specializing in multifamily replacement and new construction. “It sounds like from what we heard here at the conference that we can expect the supply chain issues, installation challenges are going to continue one to two more years. That is going to be a challenge that all of us in this industry are going to have to work on.”