Destocking and Restocking: Manufacturers Scramble to Improve Sales in the Appliance Market
Simon Maddrell, Head of Global Consumer Appliance Research at Euromonitor International, explains how the major appliance manufacturers are reporting positive growth in sales in the first half of 2010. Maddrell states that since 2009 was such a poor year for appliance sales, small but positive growth for 2010 should be expected. However, the possibility of a double dip in sales inside the appliance market is looming, considering the following factors:
- Retailers destocked their appliances in 2009 because of lower sales
- Retailers are restocking in 2010 due to increasing sales
- Consumer demand for appliances is still relatively weak
Maddrell uses the example of US retailer Lowe’s, which destocked throughout 2009, and now is increasing stock. The appliance manufacturer Whirlpool is selling directly to Lowe’s, and is reporting an increase in sales to the retailer. That means Lowe’s has a positive outlook in the North American market and is looking to expand its selection.
Arçelik also has a positive outlook for its market in Turkey and launched a four-door refrigerator. Madrell notes that his product is limited in two ways:
- The credit card facilities in Turkey cannot deal with the price tag, which is above the 2,000 Turkish Lira transaction limit
- The appliance retailers in Turkey are small in size and cannot stock such a large product
Maddrell concludes by stating that larger retailers will get better prices for their products and therefore have broader stock, whereas smaller and independent retailers will have to take a different approach to compete.