Set for Success

Set for Success

Thursday, January 23, 2025, from Floor Covering Weekly

By Suzy Krogulski

Tile is ready to slowly grow in 2025

After an uninspired year, the tile sector looks forward to a better 2025. With a strong product foundation, the sector’s manufacturers and distributors look forward to leaving 2024 behind and drive improvement in the new year.

There still remains a great deal of volatility in the market due to unresolved economic conditions. However, tile’s inherent qualities should help attract consumers, according to Shaw’s Danielle Lancianese, tile and stone director. “Tile is one of the most versatile products. I anticipate with tile being naturally sustainable and the industry taking even further steps to show this, that will have a positive impact to the performance of tile in 2025.”

Additionally, Scott Maslowski, senior vice president of sales, Dal-Tile LLC, remarked, “As interest rates start to come down, which we believe is going to happen, you’ll start to see some folks come off the sidelines. So we expect residential remodel and builder to have good years. Commercial will lag residential growth — it typically lags by about a year or so. We don’t think commercial really will go back upwards until probably 2026 at the earliest.”

Yet, as Larry Browder, executive vice president of sales, Crossville, said, what happens in 2025 is “everybody’s guess, right? Overall, we expect the category to be flat to slightly up and really driven. We’re projecting first quarters [are] probably going to be a lot like the fourth quarter of 2024. A little sluggish both residential and commercially. We’ll start to see it level out in the second quarter with low digit growth in the third and fourth quarter of the year.”

Challenges Still Ahead

Expectations for 2025, however, are tempered by existing obstacles. Noted CEO John Merola of Merola Tile, “We do expect 2025 to be a little challenging, probably with increased stress on the industry. I think the world’s getting ready for a change. That creates a lot of uncertainty for the first six months. But by the time that six months settles, you’ll see people investing for the future. We’re expecting to see growth by the second half of next year.”

Indeed, said Jamann Stepp, vice president of hard surface for Stanton, “I don’t think we’re going to come out of the gate in January, February, March and just surpass exponentially numbers we created in January, February, March of 2024. I think it’s going to be a slow roll. I do think the back half of 2025 will start to improve with hopefully some economic conditions improving, [such as] interest rates and housing affordability maybe even coming down a little further.”

A continued challenge is a lack of installation professionals. “One of the challenges we face as an industry is labor shortages, specifically in installation,” said Shaw’s Lancianese. “This is not just a 2025 issue, but each year it seems to get worse with the continued shortage of qualified installers. It’s something we as an industry have to work together to resolve.”

Tariffs are a large part of the conversation of what 2025 will look like. Said Dub Newell, CEO, Louisville Tile. “Especially with tariffs, we could see rising costs for raw materials. Labor costs could go up and probably will go up. There’s no doubt about that. I think you’re going to see that continue to be an issue for us and how the government responds to that will be big.”

Stanton’s Stepp further explained, “I do think there will be some challenges next year with this new administration coming in with imports out of China. They’ve already made the promise that they’re going to increase those tariffs. So, if you’re an importer of record here in the U.S., if you’ve not segued out of China to another Southeast Asia country or to Europe, you are probably going to see yourself getting hit pretty hard with the ability to conduct business because you’re going to be overpriced. Your costs are going to outweigh your success. And so fortunately for us, we’ve already segued. Probably 98 percent of our products are now out of China. Got a couple left that we’re working on diligently right now to remove.”

He continued, “But those are factors that could change, depending on where this goes. And who’s to say that the new administration realizes that everybody went out of mainland China to another Southeast Asia country, and they impose some form of an additional tariff which drives up the cost of product. Ultimately, that [cost ] is passed on to the consumer. And so if the consumer is not willing to pay the extra price, then there again, that stunts our ability to grow our industry. And that’s for everybody.”

Bringing Their Best

Leading tile companies, though, are the category strengths and staying on top of the trend cycle.

For example, consumers are seeking products that promote customization, eager to express personal preference. MSI’s Paulo Pereira, vice president, explained, “The use of digital printing technologies (including inkjet and 3D printing) allows for highly customizable designs and intricate patterns that can’t easily be replicated by traditional methods (e.g. MSI’s Malahari Collection). Expect to see tiles with more complex textures, gradients and photo-realistic designs — ideal for high-end, custom interior projects.”

He continued, “Innovation is a crucial factor in enhancing the value proposition of porcelain/ceramic tile and hardwood for U.S. consumers. At MSI, we see innovation as essential, not only to keep up with trends, but to lead the flooring market in the U.S. Through continuous advancements, we’re able to offer products that excite both sales reps and customers. Without innovation, it would be challenging to maintain interest and enthusiasm, so we focus on constantly introducing new features and designs that elevate the market.”

Focusing on expanding tile’s market helps, said Browder. “We’re looking at how do we prepare for when both residentially and commercially, we start to see the growth come back in the business. Crossville has always been known historically as, I think, a commercial-first brand. We’re launching this month new product lines that are developed specifically for residential, such as [the collection] Rural Retreat, that we’ve been previewing with our residential customers.

And we also believe that it has commercial appeal, particularly in the hospitality and multifamily segments.”

Maslowski noted, “We have to continue to really sell the story of tile and the advantages of tile as a whole, whether it be a sustainability story, a story of visuals or just the performance that you get by using tile. So even though there is uncertainty, the tile story differentiates itself relative to other products in the market.”

Focusing on relationships helps, said Newell. “We have to strengthen the relationships that we have with our suppliers, negotiate better terms where we can, diversify with our supply sources and collaborate on inventory planning, optimize pricing and kind of focus more on the value that we provide instead of competing on price. We can create more of a value proposition and focus on our core business.”

Merola Tile’s John Merola highlighted the importance of supporting professional installers. “We as a company, we’re members of the Ceramic Tile Distributor Association (CTDA), we support the Ceramic Tile Education Foundation (CTEF), the National Tile Contractors Association (NTCA) and the Tile Contractor Association of America (TCAA) — all are groups that are making sure we have installers, professional standards for the future. We need more professional installers. We need to invest in that.”