Stronger position

North America is a market with high penetration in most product categories. The average living space of households is above that of other regions, which means space is available for both many and large household appliances. The high degree of product penetration combined with relatively low population growth has resulted in replacement products dominating the market.

In 2012, deliveries of core appliances declined by 2%. The volumes remain at the same low level as in 1998 and are about 25% lower than the top levels in 2005 and 2006. Housing construction and sales of homes in the US increased somewhat during the year, which has raised expectations in the market of a turnaround in demand for appliances.

High degree of consolidation

The North American market is more uniform than most markets, which has led to a relatively high level of consolidation among producers and retailers. The three largest manufacturers of appliances in the US account for a major part of the market and about 70% of appliances are sold via the four major retailers: Best Buy, Home Depot, Lowe’s and Sears. The four largest manufacturers of vacuum cleaners represent more than 50% of the market. Vacuum cleaners are sold mainly through supermarkets, discount stores and department stores, such as Wal-Mart, Target and Sears. The degree of consolidation is also high among manufacturers and retailers of professional food-service and laundry equipment.

Higher market shares

Electrolux commands a strong position in appliances and vacuum cleaners in the US and Canada. Despite a weak underlying market, Electrolux has implemented several price increases on appliances over the past two years. Underpinning these actions is a well-reasoned pricing strategy that involves the Group being more selective in relation to its promotional activities. The Group’s appliances are mainly sold under the Frigidaire brand in the mass-market segment and vacuum cleaners under the Eureka brand. The Electrolux brand is positioned in the premium segment for appliances and vacuum cleaners. The Group’s professional kitchen business is still small but growing, both in traditional segments and large restaurant chains. Professional laundry equipment is sold via a distributor mainly under the Wascomat brand.

Growth opportunities

A lasting turnaround in the construction and housing sectors will result in a rise in demand for appliances. The number of small-scale establishments that serve hot food is increasing rapidly in the US. Electrolux has developed competitive solutions that meet the demands of food chains, such as efficient dishwashers and the High Speed Panini Grill.