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.
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.
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.
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.
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.
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.
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.