After two years of pandemic-related disruption, Black Friday rebates will return for major appliances this fall — but even with the splashy discounts, some shoppers may still be in for sticker shock.
The supply chain woes that hampered the availability of new refrigerators, gas ranges and dishwashers are mostly over for the biggest brands – boosting the prospect of Christmas sales on select Samsung, LG, Whirlpool and GE models by up to 40%, according to industry experts.
However, these rebates are yet to be confirmed and will be deducted from retail markups, which have risen by as much as 20% over the past two years, according to industry executives. Depending on business in the coming weeks, Black Friday’s “doorbuster” deals could result in final sale prices roughly the same as last year, when discounts were little to non-existent.
“The promotional price may be attractive compared to what something cost earlier this year, but it’s not clear it will cost less than it did a year ago,” said John Carey, owner of Designer Appliances, which owns two upscale showrooms operates in New Jersey. “It could wipe out the rise in inflation.”
It’s the latest bizarre turn in the US economy as the Biden administration and Federal Reserve grapple with soaring prices for everything from groceries to gasoline. Last month, prices rose a surprisingly strong 8.3%, prompting the Fed to hike rates for the fifth straight month. As the Fed hopes to curb inflation across the economy, industry experts say it’s hard to predict which prices will fall and by how much.
In shopping malls, apparel retailers will be forced to take steep discounts — as low as 55% — when striving for clean fashions that don’t carry through into the next season, says Craig Johnson of Customer Growth Partners. The picture is less clear for home appliances, as the surplus is not as large as for clothing retailers.
Manufacturers and retailers are discounting big-ticket items earlier than usual as the housing market cools amid rising mortgage rates. Year-to-date sales of major appliances are flat to negative, and consumer demand is down about 5% year-on-year, according to the industry consultancy. Still, device makers haven’t yet committed to many of the discounts boosting Black Friday sales.
Last year, Designer Appliances in New Jersey offered discounts on just 20 to 30 products in its stores, with anemic discounts during big sales holidays like Labor Day and Black Friday. Now it’s offering discounts on more than 400 products as major manufacturers start funding discounts again — but the discounts are still relatively modest, Carey said.
“What we don’t know yet is the sales rate for the devices between now and mid-November,” Johnson said. “Over the next 4 weeks, manufacturers are looking at the sell-through rate and if it’s stronger than expected, they won’t have to resort to the 40% discount and could move to a typical discount of maybe 15% to a maximum of 25%.”
Surely shoppers looking for new devices will now find more deals and more choice than at any time since the pandemic began. Port delays and shipping costs have fallen drastically this year, which has helped replenish inventories. Lowe’s, Home Depot and Best Buy, which account for the bulk of US home appliance sales, have canceled orders to prevent a stockpiling of goods, industry experts tell The Post.
At Chicago-based retailer Abt, home appliances are discounting an average of 10% “after two years without promotions,” said Mike Abt, whose family owns the 114,000-square-foot superstore. He predicts discounts could jump as much as 35% in the coming weeks.
“That’s a sweet spot for consumers right now and is likely to continue over the holidays,” Abt added. “We have much more inventory than ever before, with an unlimited supply of mid- to low-priced products and declining sales.”
But stepping back, Abt adds that it wasn’t a typical time for equipment sellers. Wholesale markups are still higher than a year ago, and some manufacturers mainly offer discounts for products that don’t sell fast enough, such as:
“Nobody talked about marketing for two years,” Abt said, citing the unusual lack of discounts. “The discounts traditionally go through November 1st, and it’s happening even now, but over the last two years everything’s up 20%.”
Meanwhile, many luxury brands still seem to be overcoming their distribution difficulties – particularly the luxury ones, leading to persistently long waits for Sub-Zero fridges, Viking ranges and Miele washer-dryer sets, experts say.
At Yale Appliances in Boston, new orders are down between 5% and 10% and the upscale retailer’s sales are down about 12% year over year, due in part to stock shortages, CEO Steve Sheinkopf told The Post.
“Customers still have to wait six months to a year for luxury brands,” Sheinkopf told The Post. “Miele hasn’t taken an order for dishwashers since last November.”