COMMENT AND OPINION | Malcolm Scott
MALCOLM SCOTT OPINION
The KBSA corporate chair explains that though appliance sales are up, retailers are facing a perfect storm of increased consumer demand and supply shortages caused by the Covid pandemic, not to mention Brexit
as 2020 a disastrous year for the appliance sector? The short answer is no! According to Office of National Statistics reports, UK GDP fell by 9.9% during 2020. But while that is the biggest annual drop since World War Two, it is much less than many people currently believe. During 2020, certain parts of the economy, suffered horribly, but other parts performed very well.
The longest lead times in 40 years W
While it will be no surprise to anyone to hear that AO and Buy It Direct are reporting double-digit growth, and that even though Argos never reopened 120 of its ‘stand- alone stores’ after the first lockdown, it is still reporting overall growth in 2020 sales.
It might be more surprising for readers to learn how the big appliance manufacturers fared. Whirlpool Group, BSH Group, Miele, Electrolux Group and Amica are all reporting that, while the first lockdown resulted in a drop in sales, recovery throughout the year resulted in significant overall growth for the full year, with year-on- year growth of between 5% and 17.5%.
The big appliance manufacturing groups are reporting that throughout Europe overall sales growth has been experienced during the pandemic.
Factories are still tackling the complexities of social
At a period of exceptionally high demand, there is no free stock anywhere in the supply chain and no possibility of increasing
production quickly High demand
Showrooms reopened during a period when BSH Group, Amica, Electrolux, Whirlpool – and almost everybody else – are quoting the longest lead times on domestic appliances for over 40 years. Dishwashers and refrigeration are especially badly affected by component shortages, with lead times of over 14 weeks now common. On appliances like premium range cookers and side-by-side refrigeration, lead times can be up to 20 weeks. At a period of exceptionally high consumer demand, there is simply no free stock anywhere in the supply chain and absolutely no possibility of increasing production capacity quickly. Showrooms are opening to a ‘perfect storm’, with large amounts of pent-up consumer demand alongside considerably less available stock. Independent electrical retailers who have websites and repair facilities that continued to operate throughout the shutdowns have realised that consumers need to be educated to expect delays or substitutions when selecting appliances. The good news is that most consumers are anticipating supply issues due to Brexit and Covid, so have tended to be very understanding over the past few months, often accepting whatever is available. However, a long delay in obtaining a single replacement appliance has a considerably different dynamic from a long delay in obtaining completion on a full kitchen project, especially where final payment might be delayed until the appliances can be fitted.
Alongside the problem of physically getting hold of appliance stocks is the issue of new UK and EU energy labels. Refrigeration, laundry and dishwashing energy classification bands have been recalibrated with most A-rated and A+ rated products now relabelled as D and F. Until manufacturers catch up, it is simply not possible to buy an A energy rated integrated dishwasher, fridge, washer-dryer or washing machine from any brand. Even B and C energy appliances in these categories are now very rare. Some consumers will find this hard to believe. While I am sure that the kitchen studio staff will overcome this perfect storm of various issues, the task will not be easy.
20 · May 2021
distancing, while dealing with considerable disruptions to component supplies from China, and the logistical problems of getting road freight through international zones that are in complete lockdown. Brexit adds further problems. Enormous delays have been experienced by the transport industry at continental ports and UK harbours, putting strain on even the most organised of supply chains. In many cases, transport costs have more than doubled and knock-on price increases are common.
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