By Martin Vedris
SUNSHINE, VIC: Ian Campbell, managing director of GUD Holdings, which owns the Sunbeam brand, said what many have been thinking; buy before Christmas before inevitable prices rises take effect, not just on Sunbeam product but on many brands.
“As a consumer … if I was in the market for any sort of capital goods at all … a flat screen TV or a Mixmaster … I would be buying this side of Christmas, getting the deals because I know damn well that after Christmas everything is just going to be another 20 per cent dearer, and that’s not necessarily Sunbeam, that’s across the board,” Campbell said today.
In regards to the price increases the industry has seen recently across whitegoods, brown goods and smalls, Campbell said they were “inevitable”.
“This not gouging customers,” he said. “This is purely the difference between a 90 cent dollar and a 65 cent dollar.”
With economic conditions uncertain, but the Reserve Bank set to announce another anticipated drop in official interest rates, and oil prices dropping overnight and petrol tipped to drop below $1 in Australia, there could be some good news this Christmas for retail sales after all.
“We think Christmas is going to be quite reasonable, I don’t think it is going to shoot the lights out but I think it is going to be a reasonable Christmas,” said Campbell.
“I am sure that additional cash, whether it’s from Government stimulus packages or people’s disposable incomes improved as a result of not having such high mortgage repayments, must have an impact on consumer spending.”
However Campbell also said that the economy is in such turmoil, it is impossible to predict.
“These are difficult times and particularly people in their early 20’s have never lived through this and even for people in their late 50’s, this is as bad as its ever been,” he said. “I think back to the 87 stock market crash and sure, share portfolios lost value, etcetera, but the financial structure wasn’t impacted. Where you’ve got the global financial structure being torn to pieces, and governments having to guarantee banks… even for people who don’t understand what this is all about, they just know it’s a bad thing, there is a huge amount of fear and trepidation as to what the next 6 to 12 months will look like so people might not spend as freely.
“I can’t read it. I’ve got fund managers ringing me to ask if GUD will cut it’s full year dividend and what do I think its profit forecast is going to be and quite honestly, I can’t tell you what the next month’s going to look like, so it’s a very tough time.”
Campbell said that the way forward for Sunbeam, however, is to leave fears of an economical crash aside and continue to invest in the brand and new product development.
“Now it the time to go hard because we’ve invested in the brand and in tough times people will go back to the brands they know and trust and … we will be more targeted with our promotion and the way we go to market but our product development program for the next 12 to 18 months is the strongest it’s ever been and I think again if you don’t have a level of innovation and a feature benefits story for customers, you very quickly find your product becomes commoditised and you’re just in the pack with everyone else.”