AC Sales Soar With Record Heat

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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 temperatures.”

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.”

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