NATM: Majap Promos Will Spark Q4 Sales

By Alan Wolf -- TWICE, 9/28/2009

DALLAS — A combination of manufacturer promotions and federal rebates could jump-start sales of major appliances this fall, executives of the NATM Buying Corp. said.

Bill Trawick, president and executive director of the $3 billion group, believes that national vendor programs providing discounts of 10 percent to as much as 40-percent off select products, along with Energy Star rebates and a forthcoming “cash-for-clunkers”-type appliance program, “will give our business a terrific bump.” [See story on p. 6.]

Taken together, the discounts could shave as much as $400 off the retail price of some appliances, he said.

Trawick said majap makers are also taking a page from the CE industry playbook and will be adding white goods to the roster of door buster specials on Black Friday. “You're going to see some very, very aggressive appliance deals on Black Friday,” he told TWICE during NATM's annual conference here at the Gaylord Texan earlier this month.

If successful, however, the promotions and subsidies could lead to shortages in key product categories. “No one knows what the impact of the rebates will be, and no one is gearing up for them,” Trawick warned. “Manufacturers may not have enough product if the rebate hits high.”

Promotions aside, Trawick believes the three-year-old appliance-industry downturn is finally bottoming out. “We're starting to see some turnaround,” he said, citing strength in Texas and slight improvements in some California markets.

Still hard-hit are Detroit, Florida and the Carolinas, although Michigan member ABC Warehouse is “doing better than people think,” he said.

White-goods unit sales for the 11-member buying group, comprised of some of the industry's largest independent and multi-regional dealers, is down by the high-single digits for the trailing 12 months, but continues to exceed the industry average, which is off by about 15 percent year-over-year.

“The replacement business is pretty much all there is,” Trawick said, “but we can survive on that business alone.”

Dollar volume has been further impacted as consumers continue to trade down from pricier products. “There's been a shift in mix,” Trawick noted. “Consumers aren't buying as much stainless, they're choosing $900 side-by-sides instead of the $1,400 models, and front-load washers are down to $699-$799” from $1,000-plus retails.

“The high-end appliance business won't come back for a long time,” he projected. “Homes are not worth as much, and it will take a lot longer for the high-end lines to recover.”

Fortunately, he said, “suppliers are all helping us with margins.”