Industry Background Flashcards
What are UK carpets made from?
Wool, cotton and synthetic fibres
Give some examples of synthetic materials used to make carpets, and what they are?
Nylon
Polypropylene
They are high-volume plastic by-products of the petroleum industry
Are wool carpets more expensive than synthetic?
Yes, much more expensive
How much of the UK carpet market is made up of wool carpets
10% by value of the UK CARPET MARKET
How are most carpets manufactured?
On a large scale by lunching a threat (known as yarn) into a backing material - known as tufting
What is tufting?
How most carpets are made - done on a large scale by lunching a threat (known as yarn) into a backing material - known as tufting
How are tufted carpets manufactured?
In long wide rolls
How much carpet can a single commercial tufting machine produce in 1 day?
More to 10km of carpet roll a day
How many metres 2 of carpet can large commercial carpet manufacturers produce in a day?
millions of square metres
What else can tufted machines be used to produce other than carpets?
Other tufted products, such as artificial lawns
How flexible are the tufting machines between different types of product production?
In principle, a variety of tufted products could be made by the same manufacturer on the same day, subject to suitable reconfiguration of the machine
What is the standard carpet roll size? and why?
4m or 5m wide
This allows a large single piece to be fitted to a particular rooms’ dimensions (hence term fitted carpet)
How much waste is there usually from a piece of fitted carpet?
Often 5-20%
What has become the solution to the high amount of wastage for fitted carpets?
Carpets being sold as tiles (modular carpets)
Provides a more efficient and sustainable carpeting solution
Where is modular carpet most often used?
Commercial settings
What is an alternative carpet construction technique to tufting?
Needle-felt
Typically made from synthetic materials
What are the benefits of needle-felt carpets?
They are resistant to moisture and sun, so they are suitable for external applications
What are the other uses for needle-felt textiles?
Industrial filtration
Garment manufacture
What is the annual revenue for the UK carpet manufacturing sector?
Almost £1bn
How many carpet manufacturers are there in the UK?
Approx 100 - most of which are small to meidium unquoted businesses that focus of high quality carpets
Describe most UK carpet manufacturers
Mostly small to medium sized unquote businesses that focus on high quality carpets
Who is the largest UK carpet manufacturer?
AIM listed Victoria plc - international flooring conglomerate
Is there international competition in UK carpet manufacturing business?
Yes - mostly imported carpets from the EU which tend to be focused on lower -priced segments of UK market
What % of UK carpet manufactured is made for residential use?
almost 50%
Give some examples of different places carpets are made for in the UK?
Commercial establishments such as offices, shops, hotels
More specialist sectors such as transport (coaches and cruise ships)
What is the key difference between commercial and residential carpets? Give an example
Commercial carpets need to meet the specific requirements of the customer
E.g. areas which are frequently walked on (high-traffic areas) e.g. corridors, need to be hardwearing
Those regularly exposed to moisture and soiling (e.g. cafes) require carpet that is resistant to stains/dirt
What are the level of repeat sales like in UK capret industry?
As carpets wear out there is a reasonably srrued level of repeat sales
When does additional growth of carpet sales occur?
Comes from grohome buying activities, as there is a strong correlation between people moving into a new home and then replacing the carpet
How long does it take usually for someone to replace the carpets in a property after purchase?
12-18months after purchasing
How is the UK housing market impacting carpet demand?
Being driven by the ongoing pressure to build new homes in the UK
What is the revenue growth rate of the UK carpet industry and why?
Revenue growth estimated at av 2% per year
Due to:
Links to the proprty market and capital nature of carpet purchase for most home owners
Is the UK carpet market cyclical?
Yes, but it has an attractive underlying level of growth (set 2% per year)
What are the % of UK market segments by revenue?
Commercial = 40%
Residential = 48%
Transport = 7%
Other = 5%
For the residential segment- what drives customer carpet purchasing decisions?
Variety of things, but for most is is based on look, feel and price
What does a high price indicate in UK carpet market?
High price often makes a carpet appear more attractive, as price is often assumed by home owners to be indicator of quality
What % of all floor covering sales are carpet sales?
60%
Whee are hard floor coverings preferred?
Usually kitchens, bathroom and high traffic areas e.g. hallways
Increasingly popular recently with rugs
Are carpets or hard floors becoming more popular?
Hard floors are becoming more popular (combined with rugs) because of combination of
- more efficient heating systems
- preferred furnishing styles
- changing attitudes towards health benefits of carpets vs other floor coverings
What is demand for carpet in the commercial segment driven by?
Broader set of considerations than residential
Insulation
Acoustics
Resistance to wear and staining
Lease length
Fire resistance
Budget
Sustainability
What is a key criterion for both commercial and residential market?
Short lead time - with delivery required as soon as possible, often on a certain date
How are UK carpets usually sold? (what sales channels)
Sold through specialist stores which sell other floor coverings
Retailers may sell both residential and commercial or specialist in 1
What additional services are often offered by carpet manufacturers?
Carpet fitting service
How can commercial consumers purchase their carpets?
Either from specialist store or directly from carpet manufacturer
What is demand for carpet in the commercial segment driven by?
Broader set of considerations than residential
Insulation
Acoustics
Resistance to wear and staining
Lease length
Fire resistance
Budget
Sustainability
What is often the key criterion for boht commercial and residential markets?
Short lead time
With delivery required as soon as possible and often on a certain date
What is often a key criterion driver for residential and commercial?
Short lead times
Delivery asap and often on a certain date
How are carpets sold ? (What channel)
Specialist stores (sell other floor coverings)
May sell both or specialise in 1
What services are often offered by carpet retailers?
Carpet fitting services
How can commercial customers buy carpets?
Either from specialist store or direct from manufacture
What is the structure of the carpet retailing sector like?
Skewed - small number of large national chains dominate the market
Who suppliers around 50% of the residential sector for carpets?
Specialist retailers Carpetright and Tapi Carpets, along with large home furnishing chains
Describe the structure of the uk carpet retailing sector
Skewed
Small number of large chains dominate the market
Specialist retailers Carpetright and Tapi Carpets, along with large home furnishing stores, supply 50% of residential sector
Rest of the sector is fragmented - 2,000 retailers overall ranging from medium sized chains to v small single site retailers
How many carpet retailers are there overall?
Around 2,000 ranging from medium sized chains to very small single site carpet shops
How price competitive is the carpet industry and why?
Very price competitive
As large national chains can drive the prices down
How do small and medium sized buying groups deal with the price competitiveness of the industry?
They have collaborated and formed carpet buying groups, which allows them to achieve economies of scale and thus compete more effectively
How successful is the recycling of carpets?
As they are produced so robustly, they are difficult to break down into raw materials
So recycling is very time consuming and expensive
How are most carpets destroyed at the end of their life?
As they are built to be so robust they are difficult to breakdown so recycling is expensive and time consuming
So mostly disposed of in landfill or incineration - even though the raw materials are widely recyclable
What are the environmental calls for carpet retailing?
Increasingly calling for the industry to become more env sustainable as the materials used to make carpets are widely recycled
Want to move towards circular economy- where resources are recognised as finite (usable indefinitely) - so output of one manufacturing process can be reused or reduced as the input of another product, if possible, with minimal loss of resources
