After a respectable start to 2025, flooring retailers are entering a period of uncertainty amid declining consumer confidence, persistently high mortgage rates and tariff threats.
However, despite these obstacles, dealers are putting on a brave face, focusing on the things they can control rather than worrying about what they can’t.
At the same time, they all acknowledge that the second quarter brings with it much uncertainty with tariffs, or even the threats of tariffs, creating unease in the market.
“We do have concerns as to how our customer base perceives the tariffs that are being talked about going into effect,” said Ted Gregerson, CEO of Ted’s Floors & Beyond, Anniston, Ala. “It seems it has caused some customers to want to purchase flooring before any possible tariffs go into effect. But it also seems to cause some customers to take a wait-and-see attitude.”
And yet, Gregerson remains optimistic that the next several months will continue to yield higher tickets for his business. “We expect the spending habits of those who come into our store to remain the same, which has been larger-than-average invoice amounts. Our commercial contractors seem to have some bigger jobs that will be coming our way over the next three to six months, which is encouraging. As far as retail is concerned, our marketing targeting total kitchen and bath makeovers continues to drive the type of customers into our stores who are willing to spend large amounts of money on those type projects.”
After a banner Q1 that saw a surge in traffic and a double-digit increase in sales compared to the prior-year period, Denver-based Carpet Exchange is approaching Q2 more cautiously. “The second quarter presents many uncertainties, with unpredictable tariffs and no clear signs of declining home mortgage interest rates,” said Bruce Odette, president. “Given these challenges, we remain focused on executing quotes and closing sales with urgency to capture buyers currently in the buying process. Another key driver of our business is consumer confidence, which, along with the Expectation Index, is at its lowest level in 12 years. Despite these challenges, we remain optimistic, driven by strong in-store traffic and the momentum carried over from the first quarter.”
In many ways, Odette embodies the spirit of many specialty flooring dealers—resolute and confident in the long term, albeit concerned there may be some short-term pain.
That would fairly describe Don Lovato, owner of CarpetSourceUSA, Albuquerque, N.M., who said: “Year over a year we are right where we were last year, and we have hopes to do better this year and the third and fourth quarters. All the chaos in Washington—while necessary—is causing this disruption in the market, but we feel long-term it’ll play out well for everyone.”
Some retailers said the “disruption” in Washington has slowed the sales cycle as end-users take longer to make decisions on flooring—in some cases, postponing purchases altogether. In a sign that consumers have become more hesitant to spend, government data released on March 28 showed consumer spending up by 0.1% in February, after adjusting for inflation, following a 0.6% drop the month before. Meanwhile, the personal savings rate—or how much of their incomes people set aside—rose to 4.6%.
Meanwhile, a separate survey released by the University of Michigan, showed that Americans’ views on the economy fell for a third straight month to the lowest level since 2022, as households and businesses prepare for an anticipated wave of higher prices once new tariffs go into effect.
That said, many dealers say they outperformed expectations in the first quarter, fueled by the post-presidential election bump that carried over into early 2025. While that spike in activity has slowed, it hasn’t completely gone away for some.
“While traffic patterns have shifted slightly with economic uncertainty, customers who are moving forward with home updates are investing in quality flooring solutions—and that’s where we shine,” said Susan Hadinger, president of Hadinger Flooring, Naples, Fla. “We’re optimistic about the next few months for a few key reasons. First, there’s continued demand for high-quality, durable flooring—especially luxury vinyl and waterproof options—which we’re well-positioned to deliver. Second, our local reputation and long-standing presence in the community give customers confidence when making larger purchases. Plus, our partnerships with premium brands and tailored promotions will help us stand out.”
To further draw in customers, Hadinger said she is planning strategic promotions and highlighting some of its most in-demand brands to help boost conversion and average ticket size. “That said, we’re always keeping an eye on broader economic factors,” she noted. “Interest rates, housing turnover and general consumer confidence can all impact home improvement spending. But by staying flexible, focused on value and continuing to provide exceptional customer experiences, we feel well prepared to navigate any headwinds.”
Opportunity amid challenges
Where some may see economic headwinds on the horizon, others see opportunity. That cohort includes Olga Robertson, president of FCA Network, Shorewood, Ill., who observed, “Everyone seems to be concerned about tariffs and how that will impact pricing because, as you know, that would be passed along to the consumer. I’m predicting that this will be an opportunity for domestic manufacturers to ramp up production and be even more competitive and lower prices.”
RC Willey, with 14 locations in four Western states, is counting on the new product introductions from Surfaces to spur interest, especially hard surfaces, which was down single digits in Q1. Carpet, meanwhile, was up 8%. “We are cautiously optimistic,” said Eric Mondragon, division manager/flooring buyer. “Consumers that are coming in are buyers, and traffic is up about 1% over last year, so that’s promising. The consumers that are receiving their tax returns are deciding whether to save or spend, and what to spend it on. We are gearing up for our semi-annual private sale, so this will be a good indicator on how the second quarter will be.”
Another Western dealer, Phoenix-based Baker Bros Area Rugs & Flooring, said it outperformed in Q1 vs. the year-ago period and anticipates a similar performance over the next three months—with a caveat. “Like most, it is the uncertainty of the things like tariffs and interest rates that will determine things,” Phil Koufidakis, president, told FCNews. “If the economy does less than well, it might push the better growth expected in the fall of this year to 2026.”
For Hemphill’s Rugs & Carpets, Costa Mesa, Calif., a repeat of its record-breaking 2024 would be most welcome. So far, however, Q1 2025 resulted in a 15% decline in business, mostly on the hard surface side. As for the second quarter? That’s a crapshoot. “It is a tricky and unpredictable business environment,” said Brett Hemphill, owner. “The consumer is not as comfortable given the tariffs, interest rates, etc. And we are in the upper-end segment of the market. Old business patterns have returned. We noticed a slowdown last summer due to international travel.”
Others have benefited by being in niche markets like custom home building. “Optimism is high due to the sustained increase we’ve seen from late ’24 through the year so far,” said John Bretzloff, president of Barefoot Flooring, Castle Hayne, N.C. “Fulfillment has been strong and pricing concerns (tariffs) to this point have had minimal impact for us. The mix of products is as strong as ever, which is a welcome change from just LVP.”
