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Dealers Brace For Majap Price Hikes

6/21/2006 12:04:00 PM Eastern

New York — White-goods dealers are awaiting details on a new round of price hikes on major appliances.

Plans to raise factory pricing on select white goods were announced earlier this month by Electrolux, with Whirlpool quickly following suit last week. It is unclear whether GE, the other remaining mega white-goods manufacturer, will complete the triumvirate.

Although vendors hadn’t revealed specific plans at press time, prices are expected to climb an average of 5 percent to 6 percent and will largely impact top-mount refrigerators and cooking products, according to retailers contacted by TWICE. Electrolux’s increases will become effective on July 1, while Whirlpool’s pass-along is expected to go into effect Aug. 1.

Merchants are sympathetic with manufacturers, who are seeking relief from sky-high oil, copper, steel, aluminum and other raw materials costs. The concern, however, at least by independent dealers, is that national big-box chains will delay raising price points, or even absorb the increases outright, as was largely the case during the last round of vendor price hikes last year.

“The nationals may be reluctant to pass the increases along to consumers,” said Bill Trawick, president and executive director of the NATM Buying Corp., which represents some of the countries largest regional white-goods dealers. “It wouldn’t make sense to move a $399 price point up to $409, although consumers would no doubt be willing to pay the difference.”

Also muddying the pricing waters is a recent slowdown in industry wide sales. “Inventory is starting to back up a little and retailers may be hesitant to play with prices right now,” Trawick said.

Ed Kelly, president and director of the Nationwide Marketing Group, the largest independent dealer organization, doubts that passing the increases to consumers will put a dent in business, which has been up double-digit for the group from January through May.

“Value pricing has always been driven down, to the point where the value that the consumer receives on these products is incredible, given all the features they have and all the things they can do,” he said. Like Trawick, Kelly is OK with the increases, as long as they’re consistent across the board. “The big boxes could go 80, 90 days before pushing them through, and that would put the independent dealer at a disadvantage.”

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