Appliance boom bucks personal spending's downward trend
Bread makers, freezers, smart TVs and more have stuck-at-home Americans and Michiganians pulling out their wallets and visiting appliance stores.
"There is a complete craze like I have never seen before that even beats the toilet paper rush," said Ramsey Bishar, owner of Big George's Home Appliance Mart in Ann Arbor and sister store Witbeck in West Bloomfield. "Freezers are now the hottest selling appliance. People are afraid of food shortages. We have a waiting list for freezers."
Even as personal spending in the U.S. plunged the most on record amid stay-at-home orders, people are buying all kinds of appliances. Sales from March 15 to April 11 rose for about 70% of the 88 subcategories for home and kitchen goods tracked by market researcher NPD Group.
Some of the gains were just staggering: sales of electric pasta makers up 462%, soda machines rising 283%, handheld cleaning devices jumped 284%, water filtration machines popped 152% and air purifiers rose 144%. And the widely chronicled baking trend flowered, with purchases of those bread makers surging more than sixfold.
Bishar has sold almost 500 freezers over the past several weeks versus annual sales typically totaling 200. Another 25 people are on a waiting list lasting five days to a week as the industry grapples with shortages because the outbreak is interrupting manufacturers. The company's smart home department, including smart TVs and upgrades to WiFi systems, is up 35% year-over-year, too.
"As people work from home," Bishar said, "they want a more reliable network."
Lockdown life has forced people to rethink their homes, as they have morphed into spaces where schooling, working, exercising, inventory-stockpiling and germ avoidance are new, high-stakes activities. If history is a guide, that won’t change when the world returns to some semblance of normal, according to Ian Bell, a researcher with Euromonitor International.
After Brexit and the Cape Town water shortage, people didn’t fall back into a “psychology of abundance” once the crisis passed, he said in a recent presentation. That portends a major shift toward appliances, including adding more space for refrigeration and food storage.
“It won’t be business as usual,” Bell said.
The phenomenon is global, with regional differences. In countries where people ate out a lot, like Singapore, there are now more pots and pans to clean, fueling interest in dishwashers. In places where domestic help was common, such as Brazil, the practice has ended due to social distancing, leading to a boom in cleaning devices.
The appliance industry is poised to respond because wellness-certified designs and high-tech features, like voice activation, were already in the innovation pipeline, said Seattle-based kitchen and bath designer Paula Kennedy. “It’s amazing, some of the sci-fi things they come up with,” said Kennedy, who’s been drawn to luxury appliances for her clients from Sub-Zero, Wolf and Electrolux.
Washing machines with sanitizing cycles and Samsung’s touchscreen refrigerators are primed to go mainstream quicker with added attention on home hygiene in the coronavirus era. For consumers stockpiling food, a fridge or freezer will be able to alert them when items are about to expire or need to be reordered, Kennedy said.
There are also bathroom exhaust fans equipped with germ-killing LED lights from Wisconsin-based Broan-NuTone. Consumers can reduce the use of towels, which can spread germs, with hand dryers from U.K.-based Dyson, or full-body models from Spain’s Valiryo Technologies. Even motion-triggered faucets, so hard to turn on in public restrooms, may find traction in the new multi-functional, post-pandemic home.
“If we listen to consumers there’s a whole lot of new need being created,” said Joe Derochowski, a home industry analyst NPD. “This is when stress creates great innovation.”
Even big-ticket items are selling amid surging unemployment. In March, sales in the large-appliance category, which includes washers, ovens and fridges, rose almost 6% from a year ago, according to the Association of Home Appliance Manufacturers. That bucked declines in January and February.
One reason for the gains is that due to social distancing people are shunning appliance repairs — something they would normally do to save money in an economic downturn. That’s pushed more people to splurge on new dishwashers and refrigerators, according to Jill Notini, a spokeswoman for the AHAM.
A move away from repairs helped Michigan-based Whirlpool Corp. eke out a small gain in North American sales in the first quarter, while markets in Europe, Middle East and Africa fell a combined 12%. “The demand decline in the United States is clearly not as pronounced as in China and Italy,” Chief Executive Officer Marc Bitzer said on a conference call with analysts.
Bishar, the appliance store owner, has seen sales improve every day after Gov. Gretchen Whitmer permitted construction and real-estate businesses to resume last week and more companies came online this week. Prior to that, though, sales were cut in half.
"The remodeling process is so timely and most of the projects have been put on pause," Bishar said. "Most of our business (now) is the replacement business, meaning your washer breaks, you need a washer."
But like at Bishar's stores, deep freezers have done especially well nationally, with sales up 45% versus a year ago, according to AHAM data. Most models at the websites of Home Depot and Amazon.com were sold out at the time of writing this story.
The trend appears far from over. Fears over meat shortages spurred another surge in freezer storage, according to Whitney Welch, a spokeswoman for GE Appliances. The company, a unit of Qingdao-based Haier Group since 2017, continues to see higher demand.
“People are using their appliances more than ever,” Welch said. “They are spending more time with their families under one roof cooking, cleaning and storing food.”
Detroit News staff writer Breana Noble and Bloomberg contributed.