Consumers begin to see the light at discount

Discount Store News, August 4, 1997 by Richard Halverson

Consumers in the United States have fallen in love with outdoor lighting and increasingly are coming to appreciate the security as well as the increased decorative aspects of this category.

Another facet of the outdoor lighting market, both for attached motion sensor-activated lights and nonattached low-voltage garden and patio lights: Prices at wholesale are coming down, while retailer margins are holding up fairly well.

Nonattached garden and patio lights are no longer just low-voltage, with Mason Red Dot, Boston, marketing its SiteLite, 120-volt light system that will accommodate higher wattage bulbs on a single line for greater light output.

And greater durability is becoming as important a marketing tool as falling prices. Cast aluminum and cast iron are replacing plastic or polished brass in many fixtures, both in motion-detector carriage lamps and in garden lamps.

A factor driving sales of low-voltage landscape lighting is that homeowners are increasingly aware of the security aspects of such lights, said Martin Philips, president of Economic Industry Reports, which tracks the outdoor lighting industry.

Prices of low-voltage lights are going down as manufacturers get their prices in line. But margins have also come down, he said.

Accordingly, the producer price index is declining, Martin said, and manufacturers are seeking new sources of distribution. Volume increases are still to come, he added.

With declining prices, the dollar volume of manufacturers' shipments have declined over the past three years, even though shipments increased slightly from 1995 to 1997. (See chart.)

Outdoor Lighting

Manufacturers' Shipments (wholesale dollars in millions)

Year      Attached   Nonattached(1)   Total
1994      $71.2      $63.2            $134.4
1995       58.3       63.0              21.3
1996(*)    57.0       65.0             118.4
1997(*)    53.0       60.0             119.0

Manufacturers' Shipments (in thousands of units)

Year      Attached   Nonattached(1)   Total
1994      4,840      2,328            7,168
1995      3,918      2,614            6,595
1996(*)   4,043      2,592            6,633
1997(*)   3,772      2,875            6,648

Manufacturers' Wholesale Price Per Unit (average)

          1994       $18.75
          1995        18.39
          1996(*)     17.85
          1997(*)     17.90

Wal-Mart is the major distribution channel for Toro, said Pete Klukken, a marketing specialist. Toro projects a 5% market growth for low-voltage lighting from a 1996 base of $107 million in manufacturers' shipments.

The three major factors driving the low-voltage market are to beautify one's home, add safety to steps and walkways, and provide more security against crime.

Toro and Malibu control 90% of the market, Klukken said, while Brinkman, Twilight and direct imports from the Orient account for the balance of 10%.

At Wal-Mart in Tom's River, N.J., the opening price point for an 11-light Toro kit is $29.95, while a 16-light kit, with 10 path lights and six floods, retails for $54.96.

A Regent high-pressure sodium security light was $49.97, while a basic mercury vapor security light was featured on an endcap at $19.96.

At BJ's Wholesale Club, Ocean Township, N.J., the outdoor lighting category consisted of one sku--a twin flood light from Intelectron at $19.99. Packaging defines it as "contractor grade."

Kmart in West Long Branch, N.J., reflects the chain's decision to cut back on hardware. It stocked exactly 12 pieces, eight of motion detector floods and four of low voltage. The floods consisted of a direct import program from Malaysia that Kmart markets under the name, First Defense. Twin floods were priced at $11.99 and $14.99, while two mini-halogen floods with pin bulbs were $18.96 and $24.96.

Caldor in Neptune, N.J., was offering Toro low-voltage light sets at 25% off, $39.99 for a six-light set and $49.99 for a 10-light set.

Caldor also carried a Brinkman 18-light set at $69.99, consisting of 14 path lights and four floods.

Intelectron is Caldor's motion detector vendor, with a twin-flood fixture at $14.99. In decorative coach and carriage lamps, it carries a cast aluminum unit in black at $24.99, while three styles of polished brass ranged from $24.99 to $39.99.

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