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AM17010
AMA FLOOR COVERINGS MARKET January 2000
Overview

Our price £470.25

This report covers: carpets, vinyls, ceramic tiles, wood, laminates, cork, Tufted Carpets, Woven Carpets, Needlepunch fibre bonded, Carpet Tiles, Non-Woven Carpeting, Carpet Suppliers, rugs, cushioned vinyl sheeting, uncushioned vinyl sheeting, vinyl tiles, Linoleum, wooden flooring, ceramic tiles, bamboo, contract distribution

Companies covered include: Armstrong, Marley, James Halstead, Altro, Forbo Nairn, Amtico, Tarkett Sommer, Axminster, Wilton, H & R Johnson, Pilkington’s Tiles, Tarkett, Junkers, Kährs, Perstorp, Egger, Hewetson Hardwoods, Kronospan, Timbmet , Richard Burbidge

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KEY AREAS

OVERALL MARKET

CARPETS

VINYLS

LINOLEUM, CERAMICS, WOOD, LAMINATE & OTHERS - CORK & BAMBOO

DISTRIBUTION

FUTURE PROSPECTS

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EXECUTIVE SUMMARY

In 1998 the UK floorcoverings market was worth over £1.7 billion at manufacturers selling prices. The market, which is historically subject to cyclical activity, experienced significant rates of growth during 1997, which then dramatically slowed during 1998 and continued into the first half of 1999. It is only during the third quarter of 1999 that there have been indications of recovery of growth levels within the floorcoverings market.

The market shows a trend indicative of a market in the mature stage of its product lifestyle, experiencing relatively low levels of decline and growth when compared with other newer products. High levels of growth were recorded in 1997, fuelled by consumer confidence and also by building society windfall payments. The market slowed during 1998 with different sectors of the floorcoverings market experiencing differing levels of decline or growth. This slowing down of the floorcoverings market reflected the slowing down of the economy as a whole, with high levels of interest rates and inflation and a lack of consumer confidence leading to the postponement of number of floorcoverings purchases.

The market is slowing improving during 1999 as economic confidence begins to return and rates of interest, inflation, consumer confidence and spending, all begin to improve. It is estimated that the floorcoverings market will increase by 3-4 percent during 1999 and 2000. Thereafter, the underlying annual rate of increase will be between 2 percent and 3 percent, to give an estimated value for the floorcoverings market of £2 billion by 2004.

In value terms in 1998, carpets accounted for the largest sector with 79 percent of the overall floorcoverings market, followed by vinyl floorcoverings with over 10 percent, wood and wood laminates with 4.4 percent, ceramic tiles with 3.5 percent, linoleum with 1.3 percent and cork and bamboo with just over 1 percent. The main changes in the percentage share of the overall floorcoverings market are that carpets have again lost share of the market, with wood and wood laminates and ceramic tiles both gaining significant share increases.

Carpets are the traditional type of floorcovering and account for the largest percentage of the UK floorcoverings market. Carpets are used in both domestic and contract applications and can be subdivided by carpet type.

Tufted carpets represent the largest sector accounting for 69 percent of the market by volume and worth £807 million during 1998. UK production of tufted carpet actually declined slightly during 1998 but import penetration levels continued to increase. In terms of fibre type, polyamide (nylon) dominates with 66 percent of the tufted market being made up of carpets containing 50 percent or more of this fibre.

Woven carpets are generally higher value lower volume carpets and are comprised of Axminster and Wilton carpet types. Woven carpets accounted for 8 percent of the carpet market by volume during 1998 but were estimated to be worth £300 million, reflecting their higher intrinsic value.Woven carpets are used in both the contract and domestic sectors with Axminster types dominant. A significant proportion of Wilton carpets within the UK market are lower value, synthetic imports, including a substantial range of machine made, synthetic rugs from countries such as Belgium/Luxembourg.

Needlepunch or Fibre Bonded carpets are generally low value, high volume carpets taking 10 percent share of the market in value terms, but 17 percent of the market by volume. A large proportion of this carpeting is used in the contract market, mainly in the automotive and commercial building sector. Historically, Needlepunch or Fibre Bonded carpets have benefited from "trading down" by consumers in straitened economic times.

Carpet tiles continue to perform relatively well, mainly due to the high growth levels within the contract flooring sector. Tufted carpet tiles are the main tile types that are taking share in volume terms, and subsequently boosting the carpet tile market in terms of value.

‘Others’ is comprised of fusion bonded carpet, particularly carpet tiles and ‘natural’ floorcoverings such as sisal, coir and seagrass. This sector is very niche-orientated and the floorcoverings are relatively high value.

Rugs continue to grow, due to wider availability, higher quality ranges and the growth of wood/laminate flooring.

The supply structure of the UK carpet market remains highly fragmented. Corporate restructing throughout 1998 and 1999 have continued with organisations seeking to increase market share through acquisition and merger, which is set to continue into the future. During 1998 the UK carpet supply sector was headed by Beaulieu Group of Belgium, Carpets International Ltd, Interface Europe and Brintons Ltd.

During 1998, the vinyl floorcoverings sector accounted for 10.5 percent of the floorcoverings market in volume terms and was estimated to be worth £180 million. Vinyl floorcoverings are used in both contract and domestic applications accounting, in volume terms, for 56 percent and 44 percent respectively.

The contract sector is dominated by vinyl sheeting with 66 percent of the market by value, with vinyl tiles representing the other 34 percent. The domestic sector is comprised of cushioned vinyl sheet with 81 percent, tiles with 18 percent and un-cushioned sheet with 1 percent share of the market.

The supply structure for vinyl floorcoverings is very concentrated with seven manufacturers accounting for over 80 percent of the market. In 1998, the leading manufacturers of vinyl floorcoverings included, Armstrong, Marley, James Halstead, Altro, Forbo Nairn, Amtico and Tarkett Sommer.

Linoleum is a natural product, which is currently experiencing resurgence in popularity. This sector was estimated to be worth £22 million during 1999, representing 1.5 percent of the total floorcoverings market. It is used in both contract and domestic applications with the contract sector dominating, however significant growth in the domestic sector has been reported during 1998 and 1999. The supply structure is very concentrated with Forbo Nairn the market leader and Tarkett Sommer another significant supplier.

The ceramic tiles sector continued to expand in 1998 and accounted for 3.5 percent of the total floorcoverings market by value. The ceramic tiles market continues to be dominated by imports, which account for approximately 65 percent of the UK market. This ceramic tiles sector has continued to show growth due to their growing acceptance as a floorcovering, but also due to the continuing growth of the domestic conservatories market – a significant end user of ceramic floor tiles. H & R Johnson and Pilkington’s Tiles dominate production of ceramic floor tiles in the UK.

The wood and wood laminate floorcoverings sector is continuing to increase and was worth approximately £75m in 1998, representing 4.4 percent share of the total floorcoverings market. Both wood and wood laminates are used in domestic and contract applications. The increased availability of these products and the ease of installation of wood laminates, have combined to increase market share for the wood sector. The increasing popularity of this sector has seen an increase in the number of suppliers, both from the UK and Europe. Major suppliers in 1998 were Tarkett, Junkers, Kährs, Perstorp, Egger, Hewetson Hardwoods, Kronospan, Timbmet and Richard Burbidge.

These are both niche sectors, with cork worth £14m and bamboo a relatively new product, although regarded by some as having potential for future growth.

Major channels for the distribution of domestic floorcoverings are the Independents with 42 percent share, the growing Multiples, DIY stores, Department/Variety stores and Mail Order. Leading contract applications for floorcoverings are commercial construction followed by leisure, retail, education, healthcare, and industrial and warehousing.

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TABLE OF CONTENTS

1. INTRODUCTION 7
2. SUMMARY 8
2.1 General 8
2.2 Carpets 10
2.3 Vinyls 11
2.4 Others 11
2.4.1 Linoleum 11
2.4.2 Ceramic Tiles 12
2.4.3 Wood and Wood Laminates 12
2.4.4 Cork and Bamboo 12
2.5 Distribution 12
3. ECONOMIC ENVIRONMENT 13
3.1 Introduction 13
3.2 GDP Growth 13
3.2 Inflation and Interest Rates 14
3.4 Unemployment and Consumer Spending 14
3.5 Building & Construction 14
3.6 Conclusion 15
4. CARPETS 16
4.1 Definition 16
4.2 Market Size 17
4.2.1 Market Value 17
4.2.2 Market History 18
4.2.3 Current Situation 18
4.2.4 Future Prospects 20
4.3 Imports & Exports 23
4.4 Carpet Product Mix 29
4.5 Tufted Carpets 32
4.5.1 Market Size 32
4.5.2 Fibre Type 34
4.5.3 Tufted Styles 36
4.5.4 Contract Market for Tufted Carpet 37
4.5.5 Future Prospects for Tufted Carpets 37
4.6 Woven Carpets 38
4.6.1 Market Size 38
4.6.2 Axminster Carpets 41
4.6.3 Wilton Carpets 42
4.6.4 Contract Market for Woven Carpets 43
4.7 Needlepunch or Fibre Bonded Carpets 43
4.7.1 Market Size 43
4.8 Carpet Tiles 45
4.9 Others (Including Non Woven Carpeting) 46
4.9.1 Electro-statically Flocked or Fusion Bonded Carpets 46
4.9.2 Natural Floorcoverings 46
4.10 Rugs 47
4.11 Carpet Suppliers 48
4.11.1 Market Shares 48
5. VINYL FLOORCOVERINGS 59
5.1 Introduction 59
5.2 Market Size 59
5.3 Sector Mix - Contract and Domestic Vinyl Floorcoverings 61
5.4 Domestic Vinyl Sector 63
5.4.1 The Market 63
5.4.2 Product Features 66
5.4.3 Future Prospects of Domestic Vinyls 66
5.5 Contract Vinyl Sector 67
5.5.1 The Market 67
5.5.2 Vinyl Sheeting 68
5.5.3 Vinyl Tiles 69
5.5.4 Future Prospects of Contract Vinyl Floorcoverings 69
5.6 Imports and Exports of Vinyls 70
5.7 Suppliers 71
6. OTHER FLOORCOVERINGS 76
6.1 Linoleum 76
6.1.1 Definition of Linoleum 76
6.1.2 The Market 76
6.1.3 Imports and Exports of Linoleum 77
6.1.4 Types of Linoleum 78
6.1.5 Future Prospects for Linoleum 78
6.1.6 Suppliers of Linoleum 79
6.2 Ceramic Tiles 79
6.1.1 The Market 79
6.1.2 Key Features of the Ceramic Floor Tiles Sector 82
6.1.3 Future Prospects 82
6.1.4 Imports & Exports Ceramic Tiles 83
6.2 Natural Stone Sector 88
6.3 Wooden/Laminate Floorcoverings 88
6.3.1 The Market 88
6.3.2 Product Definitions 89
6.4 Cork 97
6.5 Bamboo 97
7. DIStrIBUTION 98
7.1 Introduction 98
7.2 Distribution Channel Share 100
7.3 Furniture Independents 101
7.4 Multiples 102
7.4.1 Allied Carpets Group 103
7.4.2 Carpetright plc 103
7.4.3 IKEA 104
7.4.4 Courts 104
7.4.5 Harveys Furnishings plc 105
7.4.6 Habitat 105
7.4.7 Laura Ashley 105
7.4.8 Liberty 105
7.4.9 Topps Tiles 106
7.4.10 Other Multiples 106
7.5 DIY Multiples 106
7.5.1 B & Q 107
7.5.2 Homebase 107
7.5.3 Focus Do It All 107
7.5.4 Great Mills 108
7.5.5 Wickes 108
7.6 Mail Order 108
7.7 Department Stores, Variety Stores & Co-operatives 109
7.7.1 Department Stores 109
7.7.2 Co-operatives - Co-operative Retail Services 110
7.8 Distributors and Wholesalers 110
7.8.1 Domestic Contract Markets 110
7.8.2 Market Performance 111
7.8.3 Future Prospects 112
7.8.4 Major Suppliers 112
7.9 Others 114
8. CONtrACT APPLICATIONS 115
8.1 Commercial Buildings/Offices 116
8.2 Leisure 116
8.3 Education 116
8.4 Retail 116
8.5 Healthcare 117
8.6 Industrial and Warehousing 117
8.7 Others 117
9. KEY MARKET INFLUENCES 118
9.1 The Housing Market 118
9.1.1 Construction - New House Build 118
9.1.2 House-Moving 119
9.2 Commercial Construction 121
9.2.1 Contractors Output 121
9.3 Population Profile 123
9.4 Employment/Unemployment 124
9.5 Interest Rates 125
9.6 Personal Disposable Income and Savings 126
9.7 Households 127
10. FUTURE PROSPECTS 129
10.1 Overall Market 129
10.2 Carpets 130
10.2.1 General 130
10.2.2 Tufted Carpets 130
10.2.3 Woven Carpets 131
10.2.4 Needlepunch or Fibre Bonded Carpets 131
10.2.5 Others 131
10.3 Vinyl Floorcoverings 131
10.4 Others 132
10.4.1 Linoleum 132
10.4.2 Ceramic Tiles 132
10.4.3 Wood and Laminate 132
10.5 Supply and Distribution 132

Tables and Charts

Table 1 The UK Market for Floorcoverings Value 1990-2004 £m MSP 8
Table 2 UK Market for Floorcoverings 1998 Mix by Type - percent by Value 9
Table 3 UK Market for Carpeting 1990-1999 - at Both Current and Constant Prices £m MSP 17
Chart 4 UK Market for Carpeting (Volume m sq m) 20
Table 5 The UK Market for Carpets 1996-2004 £m MSP Current Prices 21
Table 6 Mix of Imports and Exports of Carpets – 1993-1999 By Value (£ million) 24
Chart 7 Imports of Carpets by Type - 1998 percent by Value 25
Chart 8 UK Imports of Tufted Carpets By Country 1998 percent by Value 26
Chart 9 UK Exports of Carpets By Type 1998 percent by Value 27
Chart 10 Destinations of UK Carpet Exports 1998 percent By Value 28
Chart 11 Sales of Carpeting By Type - 1998 percent By Value 29
Chart 12 Sales of Carpeting by Type 1998 - percent Share by Volume 30
Table 13 Annual Sales Of Carpeting By Type - 1990-98 By Value (£M MSP) 31
Chart 14 UK Market for Tufted Carpets 1990-98 by Value and Volume 32
Table 15 Overseas trade in Tufted Carpets - 1996 to 1999 34
Chart 16 Production of Tufted Carpets by Fibre Type - 1998 Mix By Volume percent 36
Chart 17 Market Value for Woven Carpet (£m MSP) 1990-1998 39
Chart 18 UK Woven Carpet Market by Type - 1998 by Value £m MSP 40
Table 19 UK Market for Needlepunch Carpets - 1990-1998 by Value (£m MSP) and Volume (m sq. m) 44
Table 20 Market Shares for Carpet Manufacturers percent by Value 1998 49
Table 21 UK Carpet Manufacturers - Number by Size 58
Table 22 UK Market for Vinyl Floorcoverings at Current Prices 1900- 2002 (£m MSP) 60
Chart 23 UK Vinyl Floorcoverings Market - Contract/Domestic - 1998 percent Mix by Value (£m MSP) 62
Chart 24 UK Market for Domestic Vinyl percent Value Mix by Type 1998 (£m MSP) 64
Chart 25 UK Market for Contract Vinyl 1998 - percent Mix by Value 68
Table 26 Import and Export of Vinyl Floorcoverings 1995 to 1998 - Value (£ m) 70
Table 27 UK Suppliers of Vinyl Floorcoverings - percent Share by Value 1998 72
Table 28 UK Foreign trade in Linoleum by Value £m MSP 1993-1999 77
Chart 29 UK Market for Ceramic Tiles 1998 - percent Mix of Wall & Floor Applications 80
Table 30 UK Market For Ceramic Floor Tiles Value £m MSP 1994-1998 81
Table 31 UK Overseas trade In Glazed/Unglazed Ceramic Flags & Paving, Hearth Or Wall Tiles & Glazed/Unglazed Mosaic Cubes – By Value (£ m) 84
Chart 32 Sources Countries of Imported Ceramic Tiles in 1998 - percent by Value (£ m) 85
Chart 33 Destinations of UK Exports of Ceramic Tiles 1998 - percent by Value (£ m) 86
Table 34 UK Market for Wooden & Laminate Floorcoverings 1990-1998 £m MSP 89
Chart 35 Wooden Flooring Market 1998 - percentMix by Value 90
Table 36 Market Shares of the Major Suppliers to the UK Wood & Laminate Floorcoverings Market 1998 93
Chart 37: Distribution Channels UK Floorcoverings Market 98
Table 38 Distribution Of Domestic Floorcoverings - 1998 percent Share by Value 100
Table 39 Mix of Furniture, Lighting Component & Household Article Retailers by Size 1996 102
Table 40 UK Contract Floorcoverings 1998 – Market By Type of Application 115
Table 41 Housing Completions 1990-1998 Great Britain ('000) 118
Table 42 Housing Starts 1993-1998 Great Britain (‘000) 119
Table 43 Number of Property transactions in England and Wales 1990-1998 120
Table 44 Contractors Output - New Work and RMI Non Housing - Current Prices (£m) 121
Table 45 New Orders Obtained by Contractors 1990-1998 Current Prices 122
Chart 46 Age Distribution of the Resident UK Population 1997 (‘000) 123
Chart 47 Number of Employees in Employment GB - June 1981-98 (Millions) 124
Chart 48 Interest Rates and Inflation (RPI) from 1990-2000 125
Chart 49 PDI & Savings Ratio 126
Table 50 Stock of Dwellings Great Britain – 1983-1998 127
Table 51 Average Household Size For Great Britain 1971-1996 128

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Text © 2000AMA Research

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