NPD, hhgregg Say Q4 Sales Bode Well For Majaps In 2010

By Alan Wolf -- TWICE, 2/22/2010

PORT WASHINGTON, N.Y. — Black Friday promotions helped kickstart replacement sales of major appliances during the fourth-quarter of 2009, which may portend a rebound for both the industry and the economy, The NPD Group and hhgregg reported separately.

According to the market research fi rm’s consumer tracking service, dollar and unit sales of major appliance both rose 5.5 percent during the October to December period, compared with the fourth quarter of 2008.

Dishwashers, microwave ovens and washing machines all performed particularly well in unit volume, NPD said, while microwaves, dishwashers and refrigerators (excluding compacts) each garnered double-digit dollar growth.

The latter category, which is the largest within major appliances, was up 10 percent in revenue during the quarter. Sales of top-mount refrigerators increased 21 percent, and sales of French door and bottommount refrigerators were up a startling 33 percent and 37 percent, respectively, generating the greatest dollar growth among refrigerator configurations.

Sales of microwave ovens increased 18 percent in dollars, while dishwasher revenue rose 16 percent in Q4.

“This clearly demonstrates the positive results achieved by many retailers featuring major appliances in their Black Friday ads,” said NPD home division director Mark Delaney. “In many cases, appliances were used as ‘doorbuster specials,’ something that has only started to happen in the past two years.”

Delaney noted, “Increases in sales of appliances that consumers report as being more replacement in nature, like dishwashers, bodes well for appliance retailers and manufacturers alike in the upcoming year.”

The NPD numbers mirrored results at multiregional majap and CE chain hhgregg, which reported a “significant improvement” in net sales across all major appliance categories, and a 7.5 percent spike in comp-store sales of white goods, for the quarter ending Dec. 31.

President/CEO Dennis May told analysts during a conference call this month that the company foresees “strong trends” for 2010. “The duress portion of the appliance business has taken over and has become a strong driver,” he said, “adding to stability throughout the year.”

May said the chain actively participated in Black Friday appliance promotions, which helped generate “more consumer interest around the Christmas cycle.” But despite the Thanksgiving weekend discounting, the company was pleased with the gross margin performance of appliances, which “stacked up well” against other product categories.

Chairman Jerry Throgmartin added that appliances now represent 35 percent of hhgregg’s sales, and demand is improving.

Speaking to his company’s data, NPD home division president Peter Goldman concluded, “Overall, these results are indicators that the economy and appliance industry are moving back in a positive direction, but consumers are a bit slow to accept the idea that the recession is ending, if not over.

“Consumers remain cautious in their spending, looking at lower price options,” he continued. “But the key is to provide them with products that ultimately give them a sense of value.”