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AC Sales Soar With Record Heat

NEW YORK — Room air
sales have finally reignited
following three seasons
of tepid weather
and weak demand.

But this year’s early
heat, which baked AC’s
prime Northeast market
this month with recordbreaking,
triple-digit temperatures, has also put
a strain on supplies.

While dealers and distributors are certain to
end the summer with
clean inventories, a second
wave of excessive
heat and humidity could
wipe out any remaining
stock and end the season
early, leaving money
on the table and customers
in a tizzy.

In the meantime
though, retailers are counting room air’s double
blessings of cash flow and foot traffic during an otherwise slow summer season.

“It’s been three, maybe four years since we had some
really good AC sell-through,” noted Adam Thomas, appliance
merchandising senior VP for the Nationwide
Marketing Group. Unfortunately, he said, “There’s a finite amount of inventory out there because everything’s
made offshore, and some vendors are on the verge of
running out.”

At least one national home improvement chain has
already experienced spot shortages, Thomas said, as
have some northeastern Nationwide dealers within certain
SKUs. And while some manufacturers, most notably
GE, still have sufficient inventory to fill the pipeline,
not all brands will be available through the balance of
the season, he said.

Bill Trawick, president and executive director of the
NATM Buying Corp., whose members include New York
metro-area mega chain P.C. Richard & Son, said dealers
have enough inventory to weather the current heat wave,
but “A prolonged heat could mean shortages down the
road if they can’t replenish for August and September.”

Trawick said most manufacturers source their room air
inventory overseas, and were conservative in placing orders
based on the past several seasons. Indeed, according
to wholesale figures from the Association of Home
Appliance Manufacturers (AHAM), factory shipments
of room air were down 36 percent last year, and were still
off 5.7 percent this year through May.

But despite tight supplies and a sultry summer, AC
sales are trailing past scorchers, Trawick said, reflecting
the still-soft economy. “Even with this heat we’re not
seeing all the volume of past heat waves,” he observed.
“In the past you could sell out after five days of 100-plus

Hopefully, he said, the torrid weather will help spur refrigeration
sales as well.

Warren Chaiken, president/COO of Almo Corp., a national
appliance and CE distributor, still has some remaining
AC inventory but expects that his customers will blow
through what’s left and that “the industry will clear out everything
in the channel” before the season’s out.

“It’s good to run out,” Chaiken said.

Given the limited availability and high demand, AC pricing
has remained relatively stable in the marketplace, the
executives told TWICE.

“I don’t see anybody doing anything stupid out there,”
Nationwide’s Thomas said.

Added Chaiken: “Dealers are hopefully making some
money. When it’s 108 degrees, you don’t have to give any
cooling device away.”