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Major Appliance Industry Looks To Recoup Its Lost Winter

LAS VEGAS — No one is looking forward to spring more than the major appliance industry.

A combination of severe winter weather and a series of New Year vendor price hikes — which pulled orders forward into December — led to a bruising 6.1 percent decline in majap shipments in January and February following a banner 2013.

As a result, manufacturers attending the Nationwide Marketing Group’s PrimeTime show here last week were looking to rally retailers and make up the lost time, and both vendors and dealers were hoping that warmer weather will thaw pent-up consumer demand.

“We’ve got to do 12 months of business in 10 months,” noted Sam Abdelnour, Whirlpool’s North American sales VP. And while this year’s projected industry growth of 4 percent to 5 percent is down significantly from last year’s 10 percent gains, Abdelnour said encouraging indicators abound.

“The builder industry is coming back really strong, consumers feel good about buying again, and retail has been strong in areas like Texas and the Southwest that weren’t affected by weather,” he told TWICE. “The business hasn’t gone.”

Getting that message out to dealers is an added responsibility this year, Abdelnour said, beyond just selling new refrigerators. “People will see the product, but our job is to tell them we think the industry will be strong. They’re looking for reassurance. They want to hear that it’s going to be OK.

“But you have to be a part of it,” he added. “The business is out there for those who are working for it.”

Case in point: kitchen remodels. Whirlpool field sales general manager Tom Arent put the number of annual remodeling projects at 10 million nationwide, “But how many are actively pursuing that?” he asked. “The consumer is not going to find you — you have to go out and find them.”

Whirlpool is also arming dealers with a new marketing initiative that highlights its made-in-America heritage and its long, if quiet, history of social responsibility, including support for Habitat for Humanity and the Susan G. Komen organization. “Features and price are important to consumers,” Abdelnour said, but for millennials in particular, “they are willing to pay a little more for a brand that gives back.”

Nationwide’s Patrick Maloney, recently promoted to appliances senior VP, concurred that “manufacturers came to this show with guns blazing” to make up “a lot of lost retail days,” and the group has likewise picked up the mantra of “12 months in 10.” So far it appears to be working. Written orders are up by the double-digits, which already brings them back to flat from last year, he said, and Nationwide is again poised to outpace annual industry growth after generating more dollars and twice as many units in 2013.

“There’s a lot of pent-up demand out there,” he said.

Maloney added that the gains are also being fueled by the group’s more focused and profitable three-step merchandise mix of entry and better goods, which has resulted in a 5 percent mix improvement; renewed demand for complete kitchen suites vs. single replacement purchases; and the beginning of a product-replacement cycle that comps a record growth period for appliances 10 years ago.

Majaps currently comprise 50 percent of Nationwide’s annual sales volume, or approximately $7.5 billion.