The Consumer Price Index (CPI) which measures household inflation and price changes for categories of household expenditure rose 2.1% this quarter and over the 12 months to March 2022 quarter, the CPI rose 5.1%, which was well above expectations.

The inflation rate being above the RBA target rate was not surprising for BSR Group managing director, Graeme Cunningham.

“We have all been aware of the price increases that have been happening for some time across many industries but in particular the increases to the general cost of living through higher food and fuel prices,” he told Appliance Retailer.

“The flow on effect this will have to the cash rate and interest rates, coupled with the pressure on wages will likely slow the growth we have been seeing for a long period now. However, the very low rate of unemployment is still a big factor in consumer confidence, so we remain confident in achieving our forecasts for the year.”

Hart & Co executive chairman, Rick Hart believes we are destined for a period of inflationary pressure, particularly where it applies to home appliances.

“Our industry is reliant on overseas product, so it seems inevitable that we are looking to a fairly sustained period of price increases due to rising costs, in particular fuel and shipping costs,” he told Appliance Retailer.

“This in turn will produce an inflationary curve, which added to fuel and grocery prices among others. An increase in inflation is happening right before us now. As a nation we will need to adjust to increased prices in almost every area of the economy.”

Rawsons sales director, Jon Pysing has been expecting the upward trend in inflation given the price increases already experienced in the appliance industry.

“It has had a noticeable impact on foot traffic in recent months. Consumer confidence has taken a bit of a hit and we expect increased inflationary pressures to add to that. The federal election also won’t help the state of retail over the next month or so,” he told Appliance Retailer.

“That being said, travel is not expected to return to full capacity for many years so there is still going to be consumer savings that will be spent at home. There has been a lot of money made on the stock market over the past two years that will also help the top end of town keep spending.

“Inflationary increase will hurt more for low to middle income households. If you’re fighting for commodity product spending, you will see a bigger impact.”

From the supplier side, Smeg Australia managing director, Wayne Campbell told Appliance Retailer, “While the economic conditions causing the market volatility are very unfortunate for our industry as a whole, we will continue to provide support for our business partners across all divisions, from marketing, sales and training to technical support and service.” 

He added: “This year we will continue the robust launch plans we started with Galileo multi-cooking technology to more new products in the cooking category as well as dishwashing, refrigeration and small appliances.”

Glem Gas managing director, David Gilmore believes there’s always been a two-speed economy, where consumer products get cheaper and expenses such as going out for dinner increase every year.

“Our industry has always provided consistent value growth for consumers. We have used technology and efficient manufacturing to provide products that are extraordinary for the price we sell them for,” he told Appliance Retailer.

“This year surges in the cost of raw materials, transport, energy (and soon wages), is pushing up costs like we have never seen, and it is in all manufacturing centres, so all markets are in the same boat. In the past, we would squeeze in small increases but this time there is no option but to fully pass on cost increases through increased selling prices. But taking selling prices back to where they were 20 years ago mightn’t be a bad thing. Do we forecast consumer spending to reduce as more of the household budget goes on necessities? To be honest I don’t know.”