Traffic and sales are up, but retailers continue to be tough competitors, according to Supply House Times' exclusive survey of wholesaler showrooms.

No surprise here. As predicted in Supply House Times' 1994 showroom study, the home center/do-it-yourself retailer has surpassed other wholesalers with showrooms as the single most serious competitor for business, based on responses to this year's survey.

The survey finds that 59.5% of respondents see home centers/DIY retailers as their toughest competitors vs. 33.5% who cite other wholesalers with showrooms. Home centers/DIY retailers were cited as primary competitors by only a slightly lower percentage than those who said wholesalers with showrooms in each of the last two surveys, published in 1994 and 1997.

This year's survey was mailed to 2,000 PHCP wholesale executives. Of those responding, 43.2% say they operate plumbing fixture showrooms. On average, wholesalers operate 2.7 showrooms, although 14.3% say they have three to five showrooms and another 4.3% have six to 20 or more showrooms. In the 1997 survey, 11.8% said they had three to five showrooms and 7% had six to 20 showrooms.

Wholesalers are opening showrooms at a rate comparable to that reported in 1997, 34% now vs. 34.8% then. More wholesalers are remodeling their showrooms, with 81.1% saying they remodeled in the last two years, compared with 75.9% in 1997. Also, fewer respondents, 7.5%, say they closed showrooms in the last two years, vs. 14.3% in 1997.

A showroom size of 1,000 sq. ft. to 2,499 sq. ft. is still the most prevalent, according to 48.6% of respondents, but 34.9% have showrooms of 2,500 sq. ft. to 4,999 sq. ft., and 20% have showrooms of 5,000 sq. ft. or larger.

Showroom sales and profitability

This year's respondents report higher average monthly sales volume for all showrooms and higher monthly traffic in the largest or most active showroom. For example, 23.3% say their total volume is $300,000 and higher, vs. 15.3% of respondents in 1997; and 27.6% report total volume of $100,000 to $299,999, vs. 22.5% in 1997.

In terms of monthly traffic, 60.2% of this year's respondents say they draw 100 to 499 customers to their largest or most active showroom compared with 53.1% in 1997.

In spite of higher traffic and sales, the profitability of showroom operations is not as great as was reported in 1997. The showrooms are perceived as profitable by 89% of respondents this year, compared with 94% of the 1997 respondents, while 11% say their showrooms were not profitable vs. 6% in 1997.

A slightly higher percentage of respondents can isolate showroom sales from other operations: 45.6% vs. 43.3% in 1997, but that means more than half still are unable to do so.

A survey question this year offered two more ideas on how to improve the showroom's profitability: increase the hours, evenings and weekends of showroom operation, and discontinue listing prices (and/or) match home center prices. Increasing the hours of operation is endorsed by 20% as a way to improve profitability; and 11.9% agree that not listing prices and/or matching home center prices may help to boost profits.

The May issue of Supply House Times will present survey findings regarding: who designs the showrooms; what products are displayed; back-up inventory carried; services offered; categories added in the last two years; price displayed; targeted price points; price to consumers; promotions used; which promotions are most and least effective; and rebates paid to plumbers.

Other results to be discussed in the next issue will include: the percentage contribution to sales of various customer segments, such as builders, contractors, interior designers and consumers; a breakdown of full-time vs. part-time showroom employees; average annual compensation for managers and employees; performance incentives; and what qualities are sought in salespeople.