Buoyed by accelerated A/C sales during the steamy summer of ’99, and year-round gains in home laundry as product innovations spurred replacement purchases, the nation’s top appliance merchants ended out the last year of the 20th century with a respectable 12.7 percent hike in aggregate white goods dollar volume.
All told, the 100 chains that comprise the TWICE 2000 Major Appliance Retail Registry generated $12.49 billion in majap revenue last year, compared to 1998’s revised top 100 total of $11.08 billion.
Although the nearly $1.5 billion increase was a mean feat in and of itself, the real trick was in realizing the double-digit percentage gains with fewer stores. Indeed, while Registry dealers upped their collective storefront count by 11.5 percent between 1997 and 1998, last year’s tally shows a decline of 138 units, to 5,431 outlets in total.
Clearly, majap merchants are doing more with less, thanks to an increase in higher-ticket laundry sales and greater overall unit volume. But the figures also reflect a changing retail landscape, with former white goods stalwarts Campo Electronics, Sun TV & Appliance and North Carolina utility Duke Power finally fading from the list. Their departures are making room at the bottom for smaller Registry newcomers like Roanoke, Va.’s Grand Home Furnishings (#100) and Mays-Munroe in Tallahassee, Fla. (# 93).
Meanwhile, atop the list, the action is hot and heavy as the industry’s revenue leaders jockey for better positions or defend the high ground they already hold. Although rankings for the five largest players remain static from the prior year, they belie a brewing turf war that’s better-reflected in the sales figures and store counts.
Still holding court as the No. 1 majap merchant in the land is Sears, which saw its white goods revenue grow nearly 9 percent to $4.9 billion last year. Sears continues to hold a commanding lead over its next closest competitor, second place Circuit City, whose appliance sales rose a more modest 6 percent in 1999.
But nipping at their heels is the expansionist Lowe’s, which enjoyed a whopping 45 percent increase in appliance sales – from $860 million in 1998 to $1.25 billion last year – while adding 66 units to its retinue of home improvement stores. Lowe’s is already laying claim to the No. 2 spot this year, which may be a sure bet if Circuit City continues to pull appliances from its big-box stores, as it began doing this spring in a Florida market test of new retail formats.
Clearly Sears is also feeling the heat, as the chain tacitly acknowledged during its recent annual meeting when it disclosed possible plans for freestanding appliance stores designed to take on Lowe’s and other category killers.
The bottom half of the Registry’s Top 10 is also experiencing turmoil thanks to inroads by a home improvement chain. The Home Depot, which heretofore had largely limited its white goods involvement to its upscale Expo Design Center stores, is in the midst of a major push into major appliances that could catapult it into the Top 5 in 2000. During the transitional 1999, however, the retailer is represented on the Registry solely by its 15 Design Centers, which occupy 50th place. The Expo Centers themselves, however, saw their appliance sales rocket 95 percent as seven new units joined the specialty chain.
Also on the upswing is H.H. Gregg, which nearly doubled its store count to 33 units from 18 over the past year, boosting its appliance sales 94 percent in the process to $213 million. The aggressive growth spurt helped leapfrog Gregg into the Top 10, boosting it from 13th to eighth place.
Also breaking into the Top 10 was Tops Appliance City, although its move from 11th place last year was a Pyrrhic victory for this now defunct New York area majap dealer.
Tops aside, the big are also getting proportionally bigger. The Top 10’s $10.28 billion sales tally represents a whopping 82.3 percent share of total Registry revenue, up from 81 percent the year prior. Thanks to a potent mix of aggressive expansion plans and retail consolidation, the appliance giants are clearly tightening their grip.
On a smaller scale, a handful of single-market retailers also made significant sales strides last year. Among them: Hollytron, whose 50 percent gain to $15 million propelled it from 64th to 54th place; 51st-ranked Vann’s, which grew its majaps business 33 percent to $16 million without adding units; and 96th place Rosner’s, whose single storefront pumped out an additional $1 million last year, boosting its annual appliance sales 33 percent to $4 million.