The carpet industry did very well during the COVID-19 pandemic, taking full advantage of the shelter-in-place movement to record outsized sales gains that were well above historical norms for residential carpet. Once the pandemic eased, people started spending money on travel and entertainment, and carpet sales plummeted double digits.
One flooring executive cited a report that showed Americans spent 50% more of their disposable income on home improvements like flooring than normal during the pandemic. “There was a COVID-19 pull ahead [during 2021 and 2022],” said T.M. Nuckols, president of the residential division of The Dixie Group. “Since Memorial Day two and a half years ago that trend inverted, and Americans started spending less based on historical norms [on home improvement] and went to Disneyland instead.”
The good news for carpet mills is that the underspending on flooring ended a few months ago, which should allow soft surface to regain its equilibrium. As Nuckols explained, “The market fundamentals for residential carpet, driven by a significant shortage of housing in the U.S., point to a very strong run once inflation is under control and interest rates are reduced. I believe the next four to five years we will see strong numbers in new construction and existing home sales, leading to a strong residential replacement segment and good news for all flooring categories. Also, over the past 12-18 months, I believe residential hard surface and carpet declines moved at about the same rate, which means carpet is no longer losing share to hard surface.”
By most estimates, carpet occupies 30%-35% of the home on average. Most bedrooms, many basements and some home office spaces are covered with carpet or rugs as the preferred flooring. What’s more, carpet executives say carpet is losing less share as a percentage of the market for the first time in years. They even see a scenario in which carpet takes some share from hard surfaces as consumers look for comfort, warmth and a quieter home.
“The swap from carpet to hard surface has slowed and carpet demand has stabilized,” said Warren Whitfield, divisional vice president, fibers and residential soft surface for Shaw. “I feel we are stabilizing from significant declines as we enter 2025.”
Balanced appropriately with other flooring in a home, carpet could trend in a favorable direction over the next several years, observers say. “We see residential carpet showing promising signs as consumers continue to recognize the benefits carpet offers over hard surface—especially in terms of comfort, warmth and softness,” said Travis Cramer, senior director product management, Tarkett Home. “With consumers less frequently moving from their current home, there will be pent-up demand for residential replacement in retail.”
To take advantage of this opportunity, carpet manufacturers say they must raise their game to meet the demands of consumers who are willing to spend more for the right carpet.
“While hard surface continues to enjoy unprecedented growth in the residential flooring category it has forced carpet manufacturing to evolve and become increasingly more innovative,” said James Lesslie, president/COO, Engineered Floors. “That’s something Engineered Floors isn’t afraid to do. Whether through fiber technology resulting in advancements in durability, stain prevention or color fastness, carpet will always have its place.”
Some executives acknowledge that carpet still has an uphill battle vs. hard surface; however, with a focus on improved styling, ease of cleanability and stain performance over the last few years carpet may be winning over more consumers, especially the older ones.
Drew Hash, CEO of Southwind, said hard surface “simply cannot replicate the inherent benefits of soft surface regarding affordability, comfort, warmth and more.”
Chet Graham, president of Marquis Industries, paints a similar picture. “Carpet appears to be gaining some more area in new homes and remodels. The cost to replace carpet is still the best value in the flooring industry. Consumers are also aware that, unlike hard surfaces, all quality carpeting is domestically produced.”
That domestic story should bode well in 2025 given the threat of tariffs on products like LVT/P. Adding to carpet’s story is the trend where consumers are willing to spend more on higher-end goods. “The technology to make carpet continues to get better and better,” said Jamie Welborn, Mohawk’s senior vice president, residential carpet product development. “The industry is making the best product every day, so I believe consumers will take a look at soft surface.”
Longer-term, demographics may play a more meaningful role in carpet’s resurgence, TDG’s Nuchols said. “We have baby boomers downsizing and/or moving into senior living communities. We have younger generations who are ready to get into single-family homes. With record immigration occurring in recent years, we have a general population, which is increasing in number. All these dynamics put us in a position where there is not enough housing available. So, the underlying market forces are in place for a strong rebound in the housing market.”
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