Submitted by Appliancecarguy on Sat, 01/23/2010 - 12:08pm.
As things now stand, it is hard to envision a return to the heady selling days of 2006 anytime soon. Consumers are going to be strapped for years to come and that, of course, will particularly impact the high end. On top of that, our beloved industry is going to have to figure out how to live with the fact that consumers may never return to their freespending ways of that period. Conspicuous consumption is out and fancy kitchens full of professional type appliances that never get used are out as well. This is going to require a lot of adjustment on our part and not every manufacturer or retailer is going to make the cut. I have noticed that neither Viking nor Sub Zero is showing this year again at KBIS----certainly an ominous trend once again.
In 2006, appliance shipments of the AHAM 6 products totaled 46.6 Million units. They have declined every year since, bottoming out at 36.6 Million units in 2009. That is a 21.5% decrease overall, with high-end products taking a much heavier hit. Thanks to UMRP and limited distribution, the high-end has always been a safe harbor for independent dealers. But what if the high-end doesn't rebound? Have dealers been able to cut expenses sufficiently to remain profitable with steadily declining sales? Especially high-end (profitable) sales? By now, most dealers have probably cut as much out of their spending budgets as they dare; is it enough? Will consumers once again develop an attitude of conspicuous consumption, or will this recession have a lasting impact on their willingness to pay premium prices when lower cost substitutes are readily available? Hopefully, 2010 will be the year that the industry flattens out and becomes the "new normal". The dealers that have been able to hunker down and eek out a living during this economic nightmare will probably be okay. Those that are depending on a quick rebound to put them back in black ink may end up like Bernies.
Submitted by Bermuda Bob on Fri, 01/22/2010 - 9:20pm.
I honestly think that the sheer volume of High End and/or Pro Style will take the hit of borrowers not being able to afford them ... people won't have those Line-of-Credit opportunities against their mortgage !!!
You're right about "conspicuous consumption", Mate !!!
Gone are the days of people replacing perfectly good appliances in favour of the newest "flavour of the month" ... that's going to hurt people like Electrolux who did such a nice job with Kelly Ripa ...
Also gone might be the "gimmicks" like steam because people have a tough time conceptualizing ... just like some do with convection or induction !!!
Think of the impact the TV Food Shows have had on people ... making them think they can cook better with better products ... that was Viking's premise by signing Emeril to that long term contract he tried so fervently to get out of !!! I tell you the dirty little secret from my experience - good cooking is more technique than product - that's not something too popular to with the manufacturers ... the "Foodie" nation is pretty saturated now so that influence most likely will flatten out as well ...
As building starts grind to zero and remodels are less auspicious, so goes the level of appliance spec'd ... only until bank start lending again, but in order to do so, the job market has to strengthen so as to "collateralize" those loans ... without credit sales will make rust look fast !!!
Submitted by Bermuda Bob on Fri, 01/22/2010 - 6:14pm.
1. It depends where "there" is ... because I sure don't think we're really comfortable being "here" !!!
2. Is "normal" always the norm, or is that just a mistake we make in recognizing complacency ???
3. People are only buying (A) If they have to complete a project already funded, (B) Have something that's broken down beyond repair, and/or (C) They have moved, leaving behind certain appliances and were not supplied with new ones in the new location ... Certainly, no discretionary purchasing ...
4. Anyone whose "Crystal Ball" still works reliably, can we please share ???
glory days ever returning?
As things now stand, it is hard to envision a return to the heady selling days of 2006 anytime soon. Consumers are going to be strapped for years to come and that, of course, will particularly impact the high end. On top of that, our beloved industry is going to have to figure out how to live with the fact that consumers may never return to their freespending ways of that period. Conspicuous consumption is out and fancy kitchens full of professional type appliances that never get used are out as well. This is going to require a lot of adjustment on our part and not every manufacturer or retailer is going to make the cut. I have noticed that neither Viking nor Sub Zero is showing this year again at KBIS----certainly an ominous trend once again.
MothBalls ...
Yup, and I heard Bruce Springsteen has put his song "Glory Day" in mothballs too !!!
What's normal?
In 2006, appliance shipments of the AHAM 6 products totaled 46.6 Million units. They have declined every year since, bottoming out at 36.6 Million units in 2009. That is a 21.5% decrease overall, with high-end products taking a much heavier hit. Thanks to UMRP and limited distribution, the high-end has always been a safe harbor for independent dealers. But what if the high-end doesn't rebound? Have dealers been able to cut expenses sufficiently to remain profitable with steadily declining sales? Especially high-end (profitable) sales? By now, most dealers have probably cut as much out of their spending budgets as they dare; is it enough? Will consumers once again develop an attitude of conspicuous consumption, or will this recession have a lasting impact on their willingness to pay premium prices when lower cost substitutes are readily available? Hopefully, 2010 will be the year that the industry flattens out and becomes the "new normal". The dealers that have been able to hunker down and eek out a living during this economic nightmare will probably be okay. Those that are depending on a quick rebound to put them back in black ink may end up like Bernies.
Return of High End ???
I honestly think that the sheer volume of High End and/or Pro Style will take the hit of borrowers not being able to afford them ... people won't have those Line-of-Credit opportunities against their mortgage !!!
You're right about "conspicuous consumption", Mate !!!
Gone are the days of people replacing perfectly good appliances in favour of the newest "flavour of the month" ... that's going to hurt people like Electrolux who did such a nice job with Kelly Ripa ...
Also gone might be the "gimmicks" like steam because people have a tough time conceptualizing ... just like some do with convection or induction !!!
Think of the impact the TV Food Shows have had on people ... making them think they can cook better with better products ... that was Viking's premise by signing Emeril to that long term contract he tried so fervently to get out of !!! I tell you the dirty little secret from my experience - good cooking is more technique than product - that's not something too popular to with the manufacturers ... the "Foodie" nation is pretty saturated now so that influence most likely will flatten out as well ...
As building starts grind to zero and remodels are less auspicious, so goes the level of appliance spec'd ... only until bank start lending again, but in order to do so, the job market has to strengthen so as to "collateralize" those loans ... without credit sales will make rust look fast !!!
Hmmmmmmmm ...
1. It depends where "there" is ... because I sure don't think we're really comfortable being "here" !!!
2. Is "normal" always the norm, or is that just a mistake we make in recognizing complacency ???
3. People are only buying (A) If they have to complete a project already funded, (B) Have something that's broken down beyond repair, and/or (C) They have moved, leaving behind certain appliances and were not supplied with new ones in the new location ... Certainly, no discretionary purchasing ...
4. Anyone whose "Crystal Ball" still works reliably, can we please share ???