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Luxury Appliance Biz Prepares For Price Hikes

Even wealthy consumers could feel the pinch.

Despite downward pricing pressure on luxury appliances, higher retails are almost a given for the new year, industry players tell TWICE. The only question is, by how much?

No doubt super-premium majap makers, like their mass market counterparts, are in a bind, caught between a hypercompetitive marketplace and rising costs for metal and components as a result of the Trump administration’s import tariffs. The president imposed a 10 percent tariff on $200 billion of Chinese imports on Sept. 24, including appliance parts, components and finished goods, and the duties are scheduled to increase to 25 percent on Jan. 1.

The Administration also pushed through sharp tariffs on imported steel and aluminum earlier this year, and at some point, after 10 years of relatively flat pricing, something had to give.

See: Electrolux Cites Sears, Tariffs, For Price Hikes

“We held off longer than most,” Viking Range president Kevin Brown told TWICE. “No question we’re feeling the impact of higher steel prices and tariffs,” which led to a “small increase” in cost prices this past summer, he said.

Like Brown, majap distributors believe the well-heeled luxury customer is less sensitive to price hikes than other income tiers, but only to a point. “Everyone has a limit to what they’ll accept,” observed Steve Terry, senior VP/COO of Almo Premium Appliances. “A 5 percent increase? That won’t affect sales. A 25 percent increase? That would have a great effect on business.”

See also: Schaefer’s Ron Romero Speaks Out On Tariffs

Marty Friedman, president/founder of Eastern Marketing, is more sanguine. While dealers should expect “a 5 to 10 percent increase” in factory prices next year, which will be passed directly to the consumer, he doubts it will impact premium appliance sales — particularly within the builder channel.

“The builder business is booming all over the U.S.,” he said. “The economy is strong, there’s more jobs, more manufacturing, and more merchandise will be sold. 2019 is going to be good.”

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