Promotional activity leads to strong home appliances sales; watch out for the slump

The third quarter of 2013 saw appliance sales experience a rollercoaster ride of strong volume and value gains fueled by sales and marketing, followed by what GfK describes as an inevitable slump.

In its quarterly TEMAX report for the period July-to-September 2013, report author Gwenno Hopkin said that although the ‘peaks and troughs’ generated by promotional activity is unsustainable in the long term, there were still plenty of positive signs for the future:

Heavy promotional activity [in July] by a couple of key brands resulted in significant volume and value growth. For a sector such as major domestic appliances, however, that can only generate a finite number of sales in any given period; peaks in transactions usually lead to
corresponding slumps shortly thereafter.

September sales were indeed particularly low – a trend that was further exacerbated by the disruption of the federal election.

Hopkin reserved special praise for the performance of the refrigeration category, which is traditionally a begrudging replacement purchase, but is currently outperforming expectations due to a number of exciting and innovative models at high price points.

The ongoing focus on higher-capacity and higher-end products helped to minimise the impact of monthly fluctuations. The average price of refrigerators increased, thanks to the increased share of French Door and bottom mount segments.

In washing machines, the overall average price held steady due to an increase in front loaders, and 8kg-capacity products. Cooking segments also continued to perform strongly, although overall average prices did soften in this quarter.

Although industry sources report that interest rate reductions and the change in government has not produced the desired uplift in retail sales activity, GfK demurs, saying that these factors have caused a “significant increase in consumer sentiment”.

Featured image: This is Lee Hardcastle’s winning kitchen design from the 2013 Kitchen and Bathroom Design Institute Awards.

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