Chairman has the floor: Strong retail in July/wholesale is "out of office"”

What can we expect from the summer besides sun and sand between our toes? Chairman Kent Oderud has looked at the summer sales figures for 2021.

We know that July is a strong retail month for appliances and electronics with a monthly index of 8 percent (2021) of annual sales. Customers are there to a large extent to update their kitchens and laundry rooms in both holiday homes and permanent residences, while many of the employees in our industry companies are charging their batteries at the beach ahead of the stronger autumn season. The seasonal index for the holiday month of July regarding sell-in from industry companies within APPLiA shows that this index is the lowest during the year at only 6.9 percent. These monthly indices were based on sales in 2021 and were presented in APPLiAnytt on March 16. Read more here.

Households continue to consume

Compared to April 2021, total household consumption increased by 7.5 percent, measured in constant prices. During the most recent three-month period, consumption increased by 5.3 percent in constant prices and calendar-adjusted figures, compared to the same three-month period the previous year.

A dark cloud that could affect consumers during the industry summer is that large parts of the increase in household consumption are in industries other than white goods/electronic products. For example, Statistics Sweden reports that the ”The only industry group that negatively affected household consumption on an annual basis was furniture, interior design items, household equipment and consumables, which decreased by 4.1 percent compared to the same period the previous year.”". Meanwhile, restaurants, cafes, hotels and other overnight services had a positive impact on household consumption with an increase of as much as 48 percent.

And everything is getting more expensive

The inflation rate according to the Consumer Price Index, that is, the change from the same month the previous year, was 7.2 percent in May 2022. This is an increase from April, when the inflation rate was 6.4 percent. This is the highest inflation rate in Sweden since December 1991.

The outcome was largely influenced by price increases for food and non-alcoholic beverages, where meat, milk, cheese and eggs increased the most. The category in the Statistics Sweden statistics where white goods are included together with furniture and home electronics, among other things, is called ”Inventories and household goods” and according to Statistics Sweden shows an annual increase in prices of just over 10 percent. But this is still far lower than the prices for restaurant visits and hotel stays, where accommodation prices have increased by almost 28 percent in the past year.

A hot summer?

We all hope for a warm and sunny summer, don't we? One category of industry goods that usually gets a real boost when the temperature rises is, in addition to portable air conditioners and fans, also refrigerators and freezers. Older cabinets that are not ventilated enough - the compressor has to work extra hard at high room temperatures and can be overloaded. If the cabinet also has worn out and leaky door seals - then the problem is even worse. This can give an extra boost to sales of all types of new refrigerators and freezers during hot summer days.

Should we hope for a warm and pleasant summer, reduced inflation and strong industry sales in July?

Kent Oderud

Market development