Dallas – The NATM Buying Corp. credited manufacturer’s unilateral pricing policies (UPPs) and online MAP strictures for helping it outpace its major appliance competitors and grow its better 50-inch and larger TV business.
Speaking at the buying group’s annual conference, held here this week at the Ritz-Carlton, president and executive director Bill Trawick applauded TV and white-goods manufacturers, beginning with Samsung, for restoring profitability to premium lines and leveling the playing field with Internet retailers.
In addition, five rounds of price increases by majap makers over the past two years have helped raise average selling prices (ASPs) “dramatically higher” for the $6.5 billion group, while boosting margins by about 3 percent.
The new policies have helped NATM grow its collective appliance business by 4 percent through the third quarter, compared with an industry decline of about 3.5 percent, Trawick said.
In contrast, the group posted significant declines in TV unit volume, although sales of 50-inch and larger displays were considerably higher, as are the margins and mix of price-protected models.
Those select SKUs helped push TV dollar volume up slightly, while net sales for the group – comprised of 12 major regional dealers – were flat for the year.
“We give a lot of credit to the manufacturers for their initiatives over the last year,” Trawick said. “We still have a long way to go, but we’re not seeing 25 percent- and 30 percent-off [promotions] anymore.”
Still, Trawick admonished manufacturers for allowing 10 percent-off promotional MAPs, which he described in an impassioned state-of-NATM address as a “stupid policy” that supports national accounts and forces independent dealers to relinquish much-needed profits.
“National accounts don’t give a [expletive] about margins,” he said. “You are killing us.”
He also urged vendors to emulate Samsung, and shortly LG and Toshiba, by extending their Internet price policies all the way to the checkout cart, where e-tailers often skirt MAP by revealing final discounted prices.
“We worked so hard to bring the Internet back [in line], and then we destroy profitability in the cart,” he said.
Trawick further pressed TV makers to follow the appliance industry’s lead by raising prices. “The last time I saw a price increase in TV I was 9,” he quipped.