As Floor & Decor expands to well beyond 200 stores across the U.S.—with every intention to keep growing—it has identified specialty floor covering retailers as its primary competition.
That nugget was conveyed at a grand opening of Floor & Decor’s first New York City store in Brooklyn earlier this month. When asked about Home Depot and Lowe’s, Gerald McVeigh, vice president of PRO Services, responded: “Home Depot and Lowe’s are typically going to be at about 3,000 to 5,000 square feet for their hard surface flooring. A specialty [floor covering] retailer will increase to be about 10,000 to 20,000 square feet, and that’s really our main competition.”
Given that the average size of Floor & Decor’s warehouse-format store is 78,000 square feet— typically larger than any specialty retail flooring store—could its imposing size and growth be deemed a serious threat by independent flooring dealers?
It depends on which flooring retailer you ask. FCNews reached out to several to get their take with responses ranging from “it would be foolish not to be concerned” to “we are not concerned at all.”
What all agree on is Floor & Decor’s growth has been too impressive to ignore; the flip side is Floor & Decor’s cut-rate pricing and lack of installation services favor the specialty dealer who is not in a race to the bottom and who stands behind its installation process.
Then again, Floor & Decor casts a big shadow. “I feel that it would be ridiculous for retailers not to be somewhat concerned about Floor & Decor’s presence in their market,” said Sam O’Krent, president, O’Krent Floors, San Antonio. “As a better-goods retailer, we have always separated ourselves from the boxes and Floor & Decor by focusing on our knowledgeable sales staff, quality installations and a strong dedication to our community—three areas where they have yet to be able to compete.”
Some retailers say Floor & Decor is already an existential threat and must be watched carefully. “I think Floor & Decor affects small businesses more than we realize,” said Chris Kemp, owner, Dalton West Flooring, Newnan, Ga. “Some of our customers will give a portion of their business to them instead of us. DIY customers, cash-and-carry customers and the customers that want it now are going to Floor & Decor for convenience.”
Ashlie Butler, owner of Tampa-based Bob’s Carpet and Flooring, with 16 stores, is also of the mind that dealers should not dismiss Floor & Decor. “It would be foolish not to be concerned about Floor & Decor—their cut-rate pricing is a big concern to all specialty flooring retailers,” she said. “However, that pricing may be all their customer gets. We offer one-on-one service, extensive product knowledge and are with our customers from the moment they walk into the door until their flooring is installed. We are creating a relationship that in the end will culminate in a beautiful new space.”
For some flooring retailers, Floor & Decor has yet to enter their market; as such, their perspective may be skewed compared to those facing down the behemoth from the same zip code. “Floor & Decor recently came to town, and I believe it has made an impact on tile sales for certain,” said John Bretzloff, manager of Barefoot Flooring, Castle Hayne, N.C., noting that tile accounts for about 10%-15% of his total business.
Floor & Decor’s presence in hard surfaces has not fazed some retailers who argue the big retailer’s go-to-market strategy is different. “Floor & Decor caters to a more DIY clientele in our area,” said Typhannie Harker, owner of Carpeting by Mike, Somerset, Wis. “That customer is looking for little-to-no service and installing themselves. That is not our clientele. They are fast growing and have beautiful stores with low prices. But we are not in a race to the bottom. We are here to have the opportunity to wow the customer with service and robust products.”
Echoing that sentiment is Matt Wien, partner with Marshall Flooring, Mayfield Heights, Ohio, who noted, “We are not concerned at all with Floor & Decor. Thankfully our customers place a premium on service, which eliminates Floor & Decor from the conversation.”
The Nashville market has a lot to contend with, where Floor & Decor already has locations in Nashville, Brentwood, Hendersonville and Madison. “To some degree we are always watching any competitor,” said Doug Peeples, manager, Myers Flooring Nashville. “But I have found if we concentrate on constantly try to improve, everything will take care of itself. Listening to our customer and getting that feedback from our RSAs is the key to improvement rather than worrying about the other guy.”
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