Welcome to Influencers, our annual series that speaks with the heads of retailers, suppliers and industry bodies to find out what is happening in appliances and electronics and how different companies are shaping its future.
Andrew Whitford is the proprietor at Whitfords of Five Dock, a famous family-owned appliance showroom in Sydney’s inner-west. He predicts that cooking will be a source of sales and success as the renovation market improves.
How has the first half of 2014 been for your business?
January and February were a little bit slow, a little bit soft, but being a cooking appliance specialist, we’d expect that. March, April and May have been much more solid. Cooking across the board has been good for us. We are a very heavy pro forma brand sellers these days so margin is important to us but I think the renovation market has kicked after all these housing prices have gone through the roof, in Sydney especially. Those people that haven’t sold are probably going to renovate.
We are pro pro forma. You need a good mix (or agency and traditional brands), otherwise you end up with cashflow issues. You need a mix of both to get your average store margin reasonably healthy.
What are you predictions for the second half of the year?
On the back of housing prices, I am predicting people are going to renovate and the cooking market is going to grow, certainly in the top end, whereas in the basic whitegoods — fridges and washers — is being canned everywhere so there is no margin in that: so you’ve got to go upmarket to make money.
Those people that are focused on selling good brands will do quite.
What opportunities do you see for the electrical retailing industry?
The main opportunity I see is selling up to good quality product, like induction and pyrolitic ovens, so taking the sale upmarket is where the industry needs to go.
I was on a golfing weekend with some mates recently and the house we were staying in had a Sunbeam Toastermatic oven — one of the old models where you place the bread in and it toasts it to perfection automatically — it worked like a cracker and it must have been 30 years old! I think Sunbeam took it off the market when it hit $100. They said, ‘Nobody is going to pay $100 for a toaster’. I certainly think there is going to be growth in premium small appliances because some people just want quality.
What threats are currently present in the industry?
Online. I don’t know whether it’s a threat but it’s a massive concern because the customer has got control now. They can look at pricing in the click of a button and it is very competitive out there so there are lot of silly people playing silly prices and that is a threat to our industry as a whole. If people don’t make margin they won’t stay in business.
Online is a great opportunity for people to see our store in Five Dock from wherever they may be looking but that’s only one side of it. The other side is the crazy pricing from a few cowboys just giving everything away and upsetting the market.
How is that contained? I don’t know — it’s probably not feasible to do anything other than live with it, but it puts the power in the customers’ hands whereas before they weren’t quite that well informed.
What’s your favourite product of 2014 so far?
The Miele Generation 6000 ovens have been our favourite products this year. They are simply amazing.