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Saturday, March 19, 2005

Coughin' Up More Cash for New Appliances

Looks like all the big US appliance manufacturers will be raising their prices for new appliances this year. With the prices for new appliances increasing, appliances will become less disposable and the repair vs. replace decision will be skewed in favor of doing the repair. This bodes well for the appliance repair trade. If people have to pay more for appliances, repair companies will be able to charge more for their services. We're going to have to charge more anyway because of increasing gas prices, so it'll probably end up being a wash at the bottom line. But this also means that more people will be fixing their own appliances so I predict steady growth in traffic, parts sales, and live help subscriptions here at

When consumers buy a refrigerator, dishwasher or washing machine made by Whirlpool this year, they will be paying up to 10 per cent more than last year.

Whirlpool, the biggest US manufacturer of home appliances, decided to raise prices to compensate for sharply higher raw material and transport costs.

"I don't think this industry has ever seen the order of magnitude of cost increases and shortage issues with both materials and transports that we're seeing," Jeff Fettig, Whirlpool's president and chief executive, told analysts recently.

Maytag, another home appliance manufacturer, also increased prices after being hurt by higher steel costs.

Analysts say that attempts by appliance makers to raise prices have failed before because companies would undercut one another, bringing prices back down.

But higher materials costs mean all appliance makers are in the same boat. "We are seeing no sign that any of the suppliers are breaking ranks on pricing," analysts at FTN Midwest Securities say in a research note.

[Read full article...]

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