At the last stop of the Mohawk Momentum Roadshow at Mohawk headquarters in Calhoun, Georgia, Floor Trends had the opportunity to sit down with President Paul De Cock. Learn what's top of mind for him regarding flooring retail and his outlook on the housing market for 2022.
FT: Now that the roadshow has come to a close, what are your aspirations for the year?
De Cock: I would not talk just about merchandising. I would talk about retail loyalty. I think we have a very big group of very loyal dealers and we are preparing a program to be even better in the future. In the past, we've called that our Edge Conference, and this year in December we will do it again. How can we help our customers to be much more successful, much more purposeful, give them all the tools they need to really make a difference in the marketplace? And that's what we're working on right now, which will be deployed at that conference.
FT: What stressors and opportunities does the flooring business have today?
De Cock: It's about staying in business and making sure customers stay business. We have labor disruption. We have raw material disruption. We have ocean freight container explosion and disruption. We have raw material inflation. We have energy inflation. It's not not an easy job right now to run a business. And as much as it's difficult for us at Mohawk, with a lot of resources, it's also as difficult for the retailers, our customers. We're trying to stay afloat and we're trying to keep them afloat. And we're trying to juggle all these balls and do the best we can because with all these headwinds. The market is good. So we have a lot of tailwinds on the demand and a lot of headwinds on the supply, and it's really difficult to manage all of that, but we do the best we can.
FT: What's your outlook for the housing market?
De Cock: Now there's one little wild card in this discussion and that is interest rates. Interest rates are going to go up, but the question is how fast and how disruptive will this be for housing? My view on that is that the price appreciation in the housing market will abide. Or you might even see some erosion in pricing in the homes as you come through the year. But I don't think you'll see erosion in demand because the demand for homes is a sociological effect. People want to have a house; they want to have a house outside the city. The household formation is what's driving the housing market. And so when people need a home, they are going to find a home. The question is at a lower price, I think, than it is right now because increasing increasing interest rates will drop a little bit the pricing and the financing capability of the people.
We have a good pipeline of remodel business because there were a lot of transactions the last few years. And the only negative is what is going to happen to you, the retailer? If your average ticket for a room is $2,000, that same job will go up 10 and 30 percent more because of inflation. That discretionary spend is a lot of money. Wages are not growing as fast as inflation, disposable income goes down, and they need to spend more on that job.
