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BrandSource Says Its Majaps Sales Will Outpace Industry

ORLANDO, FLA. — BrandSource outpaced major appliance industry growth last year, and should continue to do so as it overcomes sluggish first-quarter sales due to bad winter weather.

John White, executive VP of major appliances for the group, discussed the majap marketplace at the group’s recent Summit & Expo convention, here, telling TWICE, “2013 was a good year for major appliances until the government shutdown” that hurt sales momentum, along with the bad winter weather that arrived early in much of the country and hung on through the first quarter.

Bob Lawrence, CEO of Brand Source, said in his presentation to membership at the show that major appliance sales for the group were up 7.2 percent (excluding builder sales) last year, while the industry rose 4.5 percent.

White said that industry sales were down between down 6 to 8 percent for key categories through the beginning of March, due again to tough winter weather.

But he noted that sales have improved in recent weeks and that BrandSource is looking at “moderate growth” in the new year as industry sales should “increase between 1 to 3 percent.”

However, White commented that “laundry and refrigeration sales have been good” this year, and there has been “strong replacement sales” in both categories. He also noted that “premium products” in many categories are doing well.

When asked about vendor price hikes, White said that due to first-quarter market conditions “some stepped them back, but not all” manufacturers.

He stated that the U.S. is looking better and better for major appliance manufacturing since, “Vendors have been looking at more manufacturing here and see it is more reliable … predictable than overseas,” noting that both Whirlpool and GE do most of their U.S. market manufacturing here.

White also discussed BrandSource’s key whitegoods competitors, especially Sears, which still is the retail market share leader even though its share has eroded over the past few years.

He explained, “The demographics of the core Sears’ consumers line up well with our members’ expertise. They match up well with us since these customers are of a certain age, and they want selection, delivery, installation, value … really full service. That is what we can provide.” Those are services that Sears supposedly has been hard-pressed to provide in recent years.

“Where our members are in the same area as Sears, we get our fair share,” White noted.

But BrandSource members and independents in particular should not be content. White said that in the past two or three years much of Sears’s share “has gone to Best Buy and The Home Depot, when they are in the same areas.”

For instance, Home Depot has an advantage because it has “plenty of categories” to attract “a lot of customers” and the chain is “price aggressive.”

BrandSource as a whole has added product categories in recent years to get more store traffic, and when asked how that plays in this category, White said, “Outdoor is really a category that is close to major appliances.”

He said that in the category of outdoor kitchens, those upscale grills that are $500 and more have become popular and provide good margins.

White also said that members also sell “small appliances as add-on sales” when customers come in for kitchen remodeling.

And he did note one of the more interesting new vendors that is related to traditional majaps, which is Urban Cultivator, “a refrigerator that is an herb garden,” as White put it. Urban Cultivator, which exhibited at the Summit & Expo, showed several models that allow consumers to grow herbs and microgreens year-round in their kitchens, without pesticides or chemicals.

As for online sales of major appliances, White said that consumers do “plenty of price comparisons. About 75 to 85 percent of all major appliance customers do research online.” But when it comes to actual online sales for key major appliances, White said, “It doesn’t amount to much.”