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Annual Report 2016 Markets EMEA North America Latin America Asia/Pacific Small Appliances Professional Products

Major Appliances
North America

Demand for appliances grew in North America during the year. Electrolux sales of own brands increased, while sales under private labels declined. Operating income improved, driven by increased operational efficiency and lower costs for raw materials.

Alan Shaw, Head of Major Appliances North America

 

Electrolux has a strong offering in the US and Canada, particularly for such kitchen appliances as cookers, refrigerators and freezers. The appliances are predominantly sold under the Frigidaire brand in several price segments and under the Electrolux brand in the mass premium segment. The Group also sells appliances under private labels.

High product penetration and low population growth means the majority of North American appliance sales are for replacement products. In 2016, the market was also characterized by competition between several national and global manufacturers. Global competition continued to intensify and an increasing number of international manufacturers began offering full-range appliance product lines.

Consolidation among retailers is relatively high and nearly 70% of appliances were sold through four major retailers: Lowe’s, Sears, The Home Depot and Best Buy. 

Demand for appliances increased by 6% in North America in 2016, driven by an improved macroeconomic climate and rising housing starts.

Growth and innovation

Electrolux sales decreased by 0.9%. Sales increased under own brands while sales under private labels declined.

During the year, key focus was on strengthening the Frigidaire family of brands. New dishwashers were launched under the brand, that included features such as more intuitive, user friendly control panels. Operations in North America also successfully launched an award-winning front-load washing machine and dryer under the Electrolux brand.

Electrolux prioritized increasing sales through new channels, online and through contract sales to the construction industry. Contract sales have increased in line with rising housing starts and house sales.

Operational excellence

Programs to enhance efficiency and improve product quality were prioritized during the year.

The streamlining program to further increase efficiency and lower production costs continued at the cooker plant in Memphis, Tennessee, the refrigerator plant in Anderson, South Carolina and the freezer plant in St Cloud, Minnesota. The implemented measures led to increased cost efficiency and favorably impacted the positive earnings trend.

Electrolux took actions to improve product quality by strengthening product design and supplier components. As a result of these efforts, during the year, overall quality improved.

SHARE OF NET SALES
 

35%

ORGANIC GROWTH
 

-0.9%

MARKET POSITION
 

  • Core appliances 18%
  12 13 14 15 16
Net sales 30684 31864 34141 43053 43402
Operating margin 4.4 6.7 5 3.7 6.2
NET SALES AND OPERATING MARGIN
 
 
 
 
 
 
 
 
 
 
 
 
12
13
14
15
16
 
 
 
 
 
0
 
8,000
 
16,000
 
24,000
 
32,000
 
40,000
 
48,000
 
SEKm
0.0
 
1.5
 
3.0
 
4.5
 
6.0
 
7.5
 
%
Net sales
Operating margin

COMMENTS ON PERFORMANCE
 

Major Appliances North America reported an organic sales decline of 0,9%, driven by lower sales under private labels and price pressure in the market. Sales volumes of core appliances under own brands grew.

Operating income increased significantly, mainly as a result of improved efficiency in operations and manufacturing as well as lower costs for raw materials.

PRIORITIES MOVING FORWARD​
 

  • Launch of consumer-driven innovation and high quality products
  • Focus on increased cost efficiency
  • Expansion of selected sales channels

MARKET DEMAND FOR MAJOR APPLIANCES 2016 COMPARED TO 2015

 

​​​

ELECTROLUX MARKETS NORTH AMERICA

 

AVERAGE NUMBER OF EMPLOYEES 2016

 

14,838

 

Frigidaire Professional

Frigidaire Professional is a complete range of appliances with a professional-inspired look and performance, designed to fit in a standard kitchen. This brand is positioned between the Frigidaire Gallery and the mass premium segment of Electrolux. 

 

 

 

 

Frigidaire First

Products under the Frigidaire brand account for the majority of Electrolux total sales in North America. Therefore, it is of highest importance that Electrolux innovations address the Frigidaire consumers’ need to have great results, quickly, each time they use their appliances. Product innovations focus on benefits that save time, that support the family’s daily routine, and that deliver fresh food, great tasting meals, and clean dishes and clothes.

Award-winning Electrolux front load laundry

An award-winning front load laundry line under the Electrolux brand was introduced during the year. Its industry first SmartBoost™ washing technology maximizes the cleaning power of detergent by premixing it with water before it touches the clothes to achieve a deeper clean in every cycle. It is also an example of a new product leveraging global modular design.