NEW YORK – Last year was a watershed for major appliance retailers and the greater white-goods industry.
First, dealers finally shrugged off the lingering effects of the Great Recession to post the strongest sales numbers since 2008.
Even more noteworthy, 2013 marked the year that the long-reigning king of appliances, Sears, was finally dethroned.
According to TWICE’s annual Top 100 Major Appliance Retailers Report, the nation’s leading white-goods dealers posted a 9.1 percent spike in majap sell-through, to a record $26.5 billion in refrigerators, laundry pairs, dishwashers, ovens, microwave ovens and ACs.
The tally, prepared with TWICE market research partner The Stevenson Company, represents well over 90 percent of majap retail sales, and mirrors the channel’s 9 percent sales growth in total last year.
Driving the gains was a stabilizing housing market and pent-up consumer demand following five years of rocky sales. Indeed, the majority of Top 100 dealers posted double-digit increases in 2013 while only five of the ranking retailers showed declines, the most notable being Sears.
Sales slipped 1.2 percent for the iconic merchant, whose private-label Kenmore brand had once been the industry’s largest. The decline, which stemmed from core structural and operational issues and the spin-off of its Hometown Stores business (No. 5), returned Sears’ appliance sales to below the $5 billion mark for the first time in well over a decade.
It also allowed longtime No. 2 player Lowe’s to leapfrog to the top slot on an 11.3 percent sales surge.
Also having a good year was Conn’s (No. 9), which added 11 stores and $60 million in majap revenue, and Best Buy (No. 4), whose expanding Pacific Kitchen & Home premium appliance sections helped drive an 18 percent gain.
But the biggest sales surge was enjoyed by Ferguson, the 278-store plumbing and builder supply chain, which recently acquired independent dealers Factory Direct Appliance in Kansas City, Mo., and 37th-ranked Karl’s Appliance in Fairfield, N.J. The increased majap focus sent sales soaring 65.3 percent last year, carrying the company from 36th to 26th place.
Also enjoying the majap momentum, albeit vicariously, was Amazon.com (No. 20). Despite a still sparse selection of company-own inventory, the world’s leading e-tailer managed a nearly 31 percent sales gain, to $116 million, on the strength of its third-party resellers and the fees and commissions (called referral fees) it collects. For major appliances, those commissions amount to 15 percent of the total sales price up to $300 and 8 percent for any portion over $300, in addition to listing fees.
However, unlike consumer electronics, which have migrated online at an accelerated pace, white goods remain very much a brick-and-mortar category. Broken out by channel, consumer direct sales of major appliances, as represented by Amazon and Brooklyn-based AJ Madison (No. 40), represent well less than 1 percent of Top 100 sell-through, or about $160 million.
In contrast, the sector leader, with a nearly 40 percent share of Top 100 sales, is the home improvement channel, led by Lowe’s and third-ranked The Home Depot. Together with Ferguson and 16th-place Menards, the channel picked up 1.5 points of share, while the second-largest retail grouping, the mass merchants, comprised of Sears, Walmart, Target and Kmart, gave up 2 percentage points on softness at Sears and a weak year for AC and microwave ovens, which are the latter three’s sole claims to Top 100 fame.
Sales also slipped for the applianceonly channel, comprised largely of independent dealers, edging down from a 9.8 share to 9.4 percent of Top 100 sales.
Majap retail further differs from CE in that sell-through is even more concentrated among its largest dealers. While the top 10 CE retailers accounted for about 79 percent of consumer sales last year (see TWICE, May 19, p. 18), the appliance Top 10 laid claim to an 83.5 percent share in 2013, albeit down slightly from 83.8 percent in 2012.
This year’s top 10 includes the aforementioned Sears Hometown Stores, along with industry leaders hhgregg (No. 6), P.C. Richard & Son (No. 8) and BrandsMart USA (No. 10). The latter delivered an uncharacteristically sluggish performance last year amid a strong industry-wide showing, while the addition of Hometown helped push Target out of the top 10 grouping.
Given last year’s robust market, it was hard not to grow share in 2013. Even American TV & Appliance (No. 22), which shut its doors in April, went out with an 8 percent increase.
Among the handful of dealers that did lose ground last year, Baillio’s (No. 97) closed two of its three stores and suffered a 15 percent sales decline; Big Sandy Superstores (No. 73) shut three of its 16 stores and sacrificed 5 percent of its majap sales; Vann’s (No. 81) closed three of its five stores amid management turnover and lost 6 percent of its sales; and the Army-Air Force Exchange (No. 44), which unlike its naval counterpart, Navy Exchange (No. 54, up 3 percent) showed an 11.3 percent decline.
