Useful article about Major Appliance and their market data from the book called “Major Appliances and Electric Housewares” prepared by “Market research division”
MAJOR APPLIANCES
According to the U.S. Department of commerce, personal consumption expenditures for major household appliances and electric housewares amounted to $12.6 billion in 1977, which was 49% above 1972. This compares to an increase of 65% in total consumer spending during the same period. Appliances accounted for 1.05% of total personal consumption expenditures of $1.2 trillion in 1977. In 1972 they had accounted for 1.15% of the total. In 1977, appliances represented a 0.97% share of total disposable personal income of $1.3 trillion.
The relationship between total consumer spending and appliance expenditures during the period 1972 to 1977 remained essentially unchanged. Total consumer spending in constant dollars increased 17% between 1972 and 1977, while that portion spent for appliances increased 16.5%.
Retail sales information on selected major appliances appears below.
Room Air conditioners:
The U.S. room air conditioner industry will continue its recent come back, with most manufacturers confident retail business will improve by 3% to 7% in 1979. Manufacturers have been shipping at record levels.Total domestic room unit sales will reach just over 4 million. Trade sources estimate that another 250.000 will be shipped as exports. Predictions are that the industry will be closing in on its target of 5 million units which were shipped in the early 1970’s before the mid-decade decline. In 1978 there were 3 million units sold domestically and 800,000 exported.
A major portion, perhaps as much as 35% of the 60 million room units operating in homes today are at least 8 to 12 years old, creating a tremendous replacement market potential.
Vacuum cleaners:
There are currently about 20 to 30 vacuum cleaner manufacturers in the U.S. who produce 6 million to 8 million units a year. 1979 sales of vacuum cleaners are up substantially. Sales gain range from 15% to 45% over last year’s figures. Uprights remain in the leading product category. The industry is basically a replacement business.
Laundry:
The laundry industry is not as dependent on housing as are other major appliances. Only 5% of new homes are provided with a washer and dryer. 80% of the industry’s business comes from the replacement market.
Refrigerators:
Sales of refrigerators were $2.5 billion in 1978. Trade sources indicate that fewer than two homes in 100 manage without one. In 1978, 6 million refrigerators were shipped to domestic and foreign markets. General Electric, which accounts for 30% of the refrigerator market, and whirlpool, the sole supplier to sears & Roebuck with a 25% share of the market, controls the majority of the refrigerator business. Shares of the refrigerator market are based on manufacturer shipments in 1977.
A large portion of the refrigeration business goes to builders who are involved in both private home and apartment house construction, with housing starts expected to drop this year, the industry must watch this sector of its business very closely.
Dishwashers:
Dishwasher sales should approximate those of 1978 in which 3 million built-in and 600,000 portable dishwashers were sold. The industry, with a market saturation of 40%, sells half of its production to builders. Trade sources indicate, however, that fewer sales will be made to builders in 1979 and a larger portion to retailers. Due to the fact the industry is facing a mature market, the replacement business will become a large part of the total industry’s sales.
Microwave Ovens:
Microwave oven unit sales should reach an estimated 2.7 million pieces in 1979, anincrease of approximately 13% from the 1978 figure of 2.4 million units. The greatest sales increases will be for combination units, which are predicted to grow from 14% to 33% in 1979 over 1978 figures. By the mid 1980’s trade sources estimates that about 4.5 million microwave units will be sold. This will include one million microwave ranges and 3.5 million countertop models.
By 1988, however, it is estimated that only 4 million microwave units, including microwave ranges, will be sold. Replacement will account for approximately 50% of these sales. These replacement sales will begin making their real impact in the early 1980’s when the industry will start depending more on that facet of the business. With kitchens getting smaller, sales of countertops will begin levelling off.
Home saturation of microwave ovens is expected to reach 15% from an approximate level of 12% in 1978.
The five major brands, Litton, Amana, Sears, General Electric’s Hotpoint and sharp accounted for 80% of the industry’s sales in 1978.
Disposers:
Disposers, a product which has been a sleeper for retailers, is currently growing at a rate of 3 million units a year and estimates are that by 1982/1983 the market should grow to about 4 million units. Sales for 1978 increased 12%, bringing the number of units sold to 3,313,000.
Compactors:
Trade sources indicate that 300,000 compactor units are sold each year, back from the peak year the industry had in 1973. The decline in a consumer’s rejection of this product as a mass market item. With an of only 10 to 15%, projections are that only 320,000 units will be sold the 3 million units currently in consumer homes do, however, replacement market by the mid 1980’s.
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