High-end kitchen appliance brands enter discount market

Discount Store News, August 3, 1992

Kitchen appliances, like cosmetics and fragrances, is one of the categories in which department stores commanded the prestige brands, regardless of whether or not discounters wanted to sell these brands in their stores. But this near monopoly of tony brands by full-price department stores has been changing.

Now brands like Kitchen Aid are becoming more commonplace on the shelves of discount stores and discount specialty chains.

While manufacturers with a strong presence in gourmet specialty shops--like Krups--were said to be intractable when it came to working with the discounter market, a new layer of price points and brands are being gradually expanded at upscale discount stores and discount specialty chains.

The problems facing the department store industry will like result in even more prestige labels becoming available to discount retailers, and some upper crust kitchen appliance vendors are expected to begin designing products specifically for the discount market.

Marilyn Gill, senior vice president of merchandising for home decor specialist Waccamaw Corp. of Myrtle Beach, S.C., commented on the move toward high-end kitchen appliances. "We've been on that tack for about 18 months," she said. "Our department was previously Black & Decker as top of the line and Eastern Electrics as opening price point. We've been moving more into brands like Braun and so far we haven't found a lot of resistance among upper-end manufacturers, but there have been a few."

Housewares specialty chain, Lechters has succeeded in stocking Krups appliances and, beyond the appliance category, has added Le Creuset cookware and Henckels cutlery. The housewares specialty chain is likely to continue building a reputation as a hybrid between a housewares discounters and a gourmet chain.

East Coast regional discounter Caldor is one of many chains which has added selected upscale goods--like Kitchen Aid's Ultra Stand Mixer, Model KSM90 for about $240, and Kmart stocks it as well. The high-turning, low-ticket promotional modes are still the backbone of the kitchen appliance department, but comments from retailers indicate assortments are being redefined toward the upper end.

While Kmart has not ventured much beyond the traditional discount kitchen appliance brand selection, it is reaching toward the "best" selections from these vendors, such as Mr. Coffee's Accel model in which the chain is "doing very well," a company spokesman said. In addition, the overwhelming success of juicers at several price points has caused Kmart to test additional shelf space for these trendy appliances in some markets.

But the move of discounters into better and best appliance selections is not viewed as further erosion of department store strength by those vendors that supply both discount and full-priced stores.

John Blackwell, executive vice president of sales & marketing at Krups' parent, Moulinex, Closter, N.J., for one, acknowledged that discount stores are becoming more important to the company, but does not see this as signaling the end to the department store era.

"Many manufacturers and retailers feel that department stores are fading and may totally disappear. I disagree. There will always be a consumer demand for the service and selection provided by the department store... I believe that the small electric appliance business can remain in the department store market while taking advantage of the increased popularity of discounters and mass merchants."