Premium appliances the hero of an industry suffering slight declines

Higher end major appliances are experiencing a renaissance in popularity, due to advances in technology, effective marketing and design improvements, according to sales figures released by GfK Retail & Technology.

In the final quarter of 2014, including the all-important Christmas period, major appliance sales totaled $834 million, a 2 per cent increase on the same quarter in the year prior. This improvement, however, could not disguise a broader, albeit slight, decline in total sales for the year. In 2014, Australian consumers spent $3.221 billion on major appliances, which was down 0.2 per cent on 2013.

“Major domestic appliances achieved a 2 per cent year-on-year value growth in quarter 4: the highest
quarterly year-on-year growth rate for the sector throughout 2014,” a GfK spokesperson told me. “The
underlying cause of the growth was the relatively weak performance of quarter 4 in the previous year.

“Promotional activity earlier in the year had encouraged consumers to bring their purchase of major appliances forward, resulting in a corresponding softening of sales in the post-promotional period. In 2013, quarter 4 represented 26 per cent of total annual revenue, whilst quarter 4 in 2014 represented 27 per cent.”

Although the total value of sales eased year-on-year, the industry can take heart from the types of appliances attracting consumer interest. GfK reports that aspirational appliances are in vogue, justifying the recent big-money retail renovations to cater to these premium customers.

“One of the key trends for major appliances in 2014 was the growth in popularity of higher-end products. Commanding a higher average price, the growth of these products resulted in an annual 0.5 per cent value growth of the sector, disguising an actual decline in volume sales.

In particular, segments such as bottom mount, French door, pyrolytic ovens, electric induction hobs, canopy/cartridge hoods and condenser dryers showed double-digit value growth, compared to 2013.”

Major Domestic Appliances Sales ($million)

Q1, 2014 Q2, 2014 Q3, 2014 Q4, 2014 Q4 14/Q4 13 Q1-4, 2014 Q1-4 14/Q1-4 13
764 806 817 834 2.00% 3221 -0.20%

Source: GfK Retail & Technology

This author is on Twitter: @Patrickavenell

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