F&P sales soft after droughts demand restrictions

By Sarah Falson

SYDNEY: Fisher & Paykel has admitted that sales over December and January were “softer than expected”, as part of its sales revenue announcement for the period of April 2006 to January 2007.

“The Australian market has softened and is very competitive,” said F&P managing director and CEO, John Bongard, in the report.

"The traditional appliance peak summer selling season, especially for refrigeration product, has yet to eventuate. As a result, sales over the Christmas — New Year period were down and suppliers have increased discounts to attract sales.”

Results include a small 3.3 per cent increase in the Australian market compared with the prior corresponding period.

The USA market increased 2.9 per cent while New Zealand experienced a disappointing losdecline of 2.9 per cent.

Bongard blames water-saving incentive programs offered by the government for the purchase of water-smart washers for the less-than-expected earnings.

Fisher & Paykel has traditionally dominated sales of top load washing machines, which are typically less water efficient than front loaders and rarely qualify for water efficiency rebates.

“In response to the severe drought conditions, all state governments are offering substantial incentives to consumers to buy water efficient washing machines. To retain sales, we have discounted our range of Smart Drive washing machines by offering cash backs on new purchases,” he said.

However, the brand has released a top-loading, “very water efficient” Aquasmart washing machine in Australia which has “been very well received”, according to Bongard.

“Aquasmart is the only top-loading machine in Australia that qualifies for the state government incentives. Sales in the first few weeks since release have been very encouraging and a further mid-size model is planned for release in the new financial year,” said Bongard.

F&P’s sales in the USA are “in decline”, according to the report, as the market suffered a general decline, meaning other major suppliers are offering huge discounts and incentives to retain sales volume, posing steep competition for F&P.

“Being a relatively new brand in the USA, this has affected our sales,” said Bongard.

The report also mentions that raw material prices are at an all-time high, which has also negatively affected the company’s monetary turnover.

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