Floor retailers set to hike prices
FLOORING FORUM • Readers' Survey • February 26, 2021
Most flooring retailers say they are set to hike prices as a response to the opportunity of increased consumer demand and the threat of anticipated supply cost increases.
Floor retailing has proved remarkable resilience in the face of the coronavirus challenge according to the latest survey of readers of The Stocklists
– 2020 ended ahead of the previous year for the majority of stores and expectations are high for an even stronger performance this year.
In terms of sales performance in 2020, only 12% said it had ended “a lot worse” than 2019 while 59% said it was better than business before the pandemic, including 27% saying it was much better.
About 57% of retailers say they have sold more online over the last year, 26% say a lot more, showing that the sector has responded to the challenge and opportunity of switch to the internet to protect their business.
The use of appointments for retailers, in-store and by video has been a hugely successful outcome of lockdown with many reporting that it is easier to close a sale and stop consumers shopping around in this more personal environment. 63% of our respondents plan to make more use of the approach in the coming year.
And only 15% do not have faith in the potential of pent-up demand to boost their business in 2021 – 46% are expecting some additional increase over normal business while 24% are anticipating a strong surge of extra sales.
So overall, by the end of 2021 – if there are no further lockdowns – 56% of retailers expect sales to be better than a typical year with a fifth reckoning to gain more than 10% in extra sales and a tenth expecting sales to be up by more than 20%.
Almost everyone is putting up prices! 81% of our survey sample says they’ll be marking up in 2021
with 10% saying they will make significant increases. But this is against a backdrop where over 90% expect prices rises from suppliers of which a third are expecting substantial increases. Despite some issues after the first lockdown and logistical challenges within the UK and from import difficulties, 57% retailers said manufacturers and suppliers have coped pretty well and another 5% said very well. A third did not agree!
“Reps being furloughed makes me very angry. It’s been impossible to get prices,” said a retailer in Herefordshire.
We asked our readers what the Government should do to help now and the responses were split fairly evenly between those wanting a faster route to end lockdown – “frustration is growing”
said one – and those asking for continued caution to ensure we were on top of the pandemic before easing off.
“I do believe that you are safer coming into our large flooring shop than a supermarket, we can make appointments with customers to avoid lots of people being in the shop,” said a retailer in South Wales.
But the internet issue has come more strongly to the fore during lockdown with many respondents saying the online-only operations should pay more tax and business rates should be reduced for retail.
A reader also suggested “lowering the VAT to 15% for a year for bricks and mortar stores and increasing VAT to 25% for the web stores long-term.”
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