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The company said the floor price was forced helpless
In a recent report released by the National Bureau of Statistics, it was revealed that flooring and other construction and decoration materials, along with furniture, experienced the highest growth in retail sales in December 2012. Specifically, furniture sales increased by 32.4% year-on-year, while construction and decoration materials rose by 23.3%. Despite this positive trend, the atmosphere in some flooring stores in Xicheng was far from lively. During the end-of-year period, which is typically a slow season for sales, many stores were nearly empty, with very few customers walking through the doors.
A salesperson at one of the floor stores explained, “The end of the year is not a busy time. Workers are on leave, and people are more focused on buying new items rather than flooring.†Many workers from flooring and home manufacturing companies had already returned to their hometowns for the holidays. Even if orders were placed now, production would not start until after the Lunar New Year, meaning customers wouldn’t receive their flooring until March or April.
Unsurprisingly, some well-known home stores quietly raised their prices. A sales representative at one store mentioned that a price increase was expected this year. “Our factory is based in Guangdong, and due to rising raw material costs, we received a notice about a 15% price hike. However, since business is tough at this time of year, manufacturers have also reduced their profit margins by around 5%,†they said.
Inside the store, only two old models were on sale, and the rest of the products were either out of stock or not available at previous price points. Another flooring store had taken a different approach—cancelling discounts as a way to subtly increase prices. A customer who was looking at samples expressed surprise: “I remember that the same brand of solid wood flooring used to cost 246 yuan half a year ago, but now it’s 318.â€
A clerk at the store explained, “The factory has changed its sales strategy. This is now the actual price, and there will be no more discounts. We can offer you a small gift or a lucky draw instead.†The customer added, “The price keeps going up, and the old prices are gone. I don’t want to buy it now. I’ll wait for it to go up even more.â€
Industry insiders suggest that the price increases in home goods like flooring are driven by rising costs of raw materials and labor. “Wages have gone up from 1,500 to 2,000 yuan per month. With some staff returning to their hometowns, we may need to raise wages again next year. Some employees even say they won’t work without 2,500 yuan. Especially for high-end flooring salespeople working in luxury home stores, the base salary is 2,500 yuan plus commission,†they noted.
Additionally, the costs of materials such as wood, hardware, paint, and coatings have all gone up, and wages for factory workers, sales staff, and installation teams have also increased. In response to these challenges, some salespeople are encouraging early purchases to avoid future price hikes. “We can take your deposit now, and you can choose when to receive your order. Even if the price goes up, we’ll still process your order at the original price,†they assured potential buyers.