Home Depot Inc. is adding more appliance brands to its online load and in a small group of stores, creating a glimmer of possibility the home-improvement retailer could shift its perfunctory stance on washers and fridges, as appliance sales have become a drain on the profits of its competitors in the category, according to The Wall Street Journal.
This week, Home Depot said it was broadening the appliance brands it offers by adding Whirlpool Corp. and Electrolux AB's namesake and Frigidaire lines. They will be available in about 100 brick-and mortar stores — less than 5 percent of its base — as well as its online store. But the new appliances can be ordered in all U.S. stores through the company's Depot Direct delivery service, which includes free delivery and haul-away.
The company says it doesn't expect the additions to have a material effect on sales, but analysts say the move reflects a competitive pounce — and could presage a shift in Home Depot's appliance strategy.
Laura Champine, an analyst for Canaccord Genuity Securities, said the move certainly had the look of a trial of an appliance strategy similar to that of its smaller rival, Lowe's Cos. Traditionally, Home Depot has been lukewarm toward the appliance category because of its low margins.
Though Home Depot has more stores than Lowe's — 2,254 to Lowe's 1,747 — Home Depot's share of the appliance market is roughly 10 percent versus Lowe's share in the high-teens and leader Sears Holdings Corp. with greater than 20 percent, according to Champine's estimates.
But she noted that this is an expansion of brands in stores that already have strong appliance sales, so it may not represent as much of a strategy shift as one in which Home Depot tested a number of different types of stores and markets.
"It wouldn't surprise me if this is a competitive move, now that they've seen some vulnerability at Sears and Lowe's," she said.
Read more about energy-efficient appliances.
User Comments