Beko Australia and New Zealand managing director, John Brown expects the market to continue being tough for at least another 12 months.
“We haven’t seen the full flow on effect of interest rate rises into people’s pockets, whether they’re renting or paying a mortgage, it’s going to be a big cost factor,” he told Appliance Retailer in a recent interview.
“We’re all hoping that by the second half of next year, interest rates will start to come off as economic conditions become tighter. But I think most of us are gearing up for a continuation of a tough 12 months. We’re also comparing against a Covid period, which no one forecast, but there’s no point in that.
“Even facing the headwinds that we saw coming over the last 12 months, we believe this is a time when a smaller player who is still growing, should be going out on the front foot. If you’re a market leader with full market penetration and full distribution seeing the headwinds, you’re going to need to be conservative. Those things create opportunities for smaller players like us and I think we’re already taking advantage of that.
“The latest data is showing that consumers are holding off on purchases for the types of products we sell. For people who aren’t able to hold off on this type of purchase, they’re going to buy from a brand they can trust and a brand they know is going to back them – both Beko and Hitachi offer a five-year warranty for added peace of mind. From what we see in Beko’s consumer reviews, a trusted brand is a major influencing factor in the purchase decision.
“The challenge for the industry, retail or supply side, is holding up ASPs because you need to turn a dollar through your tills in order to pay for higher costs such as fuel levies and wages. We need to do anything we can for each other to hold up ASPs. Suppliers can’t sell anything without a retailer and retailers have nothing to sell without suppliers.”
Hitachi executive general manager, Gaurav Sathi believes the challenge for the appliance industry over the next 12 to 18 months is two-prong.
“The first is recognising that Covid days have passed. We need more realistic aspirations around margins and product positioning, both as suppliers and retailers,” he told Appliance Retailer.
“The second is that the reason Covid was good for the appliance retail industry is because we had less competition for share of wallet. Now people are travelling, going out and spending money where they weren’t able to 18 months or two years ago.
“Being there as a credible brand to both end customers and retail partners, and manufacturing and bringing innovative products, to give consumers a reason to buy our products against anything else is going to be key.”