Sweeping up sales - Category Update: Housewares

Discount Store News, Nov 4, 1996

If numbers don't lie, then those involved in the housewares industry--from manufacturers to retailers--ought to feel pretty good right now.

A study released in September by the National Housewares Manufacturers Association, which compared 1994 and 1995 housewares expenditures, shows that consumers spent almost $58 billion on housewares last year compared to less than $54.5 billion in 1994. As might be expected, total household expenditures also increased, from $544 in 1994 compared to $567 in 1995, and the number of households increased from 100 million in 1994 to 102.2 million in 1995.

To put those numbers in perspective, on average, households spent more on housewares last year than they did on direct education payments ($472), fruits and vegetables ($448) and almost as much as they did on medical services ($587).

There is plenty of good news for discount stores since the study shows that their $1.9 billion sales increase from 1994 ($14 billion) to 1995 ($15.9 billion) led sales increases across all retail segments. Of the "big three"--discount stores, department stores and specialty stores --discount stores had the largest share of business with 31.5 percent, compared to department stores' 11.1 percent and specialty stores' 9.1 percent. Additionally, housewares sales at discount stores grew 13.6 percent, eclipsing total discount store sales increases by almost 3 percent, according to the NHMA study.

Steve Robinson, general merchandise manager of housewares for Omaha, Neb.-based Pamida, says that the housewares department is a key component of the retailer's success formula. Housewares account for between 7 percent and 8 percent of the company's floor space. "It is one of the fastest-growing departments at Pamida because the industry is aggressively and constantly offering new products that are of value to our customers, and that value is both price and functionality," Robinson says. "Our customers want both, and they can get it."

Braintree, Mass.-based Bradlees is also seeing solid housewares sales, according to Mark Cohen, chairman and chief executive officer. In its continuing effort to trade up its customers, the retailer is moving away from offering very low priced housewares items, extending its range to mid-priced goods. Cohen says Bradlees is also focusing on offering a more complete assortment of housewares to its customers and in doing so has managed to carve out 50 percent more space for housewares in all of its stores. "Business is sensational," says Cohen.

According to the NHMA study, housewares saw two areas of growth between 1994 and 1995: personal care products and miscellaneous household equipment, a category of 17 classifications including clocks, calculators, and lamps and lighting.

Although personal care product sales accounted for just 16.7 percent of the entire housewares market in 1995, these sales increased the most--12.6 percent--from 1994 to 1995. In this category, shaving-related sales jumped the most, increasing 19.7 percent. Hair care product sales were second, with a 15.5 percent increase, and sales of non-electrical items for the hair were third, with a 12.4 percent increase. At Bradlees, one of the top-selling personal care items is a Braun ultra toothbrush.

Miscellaneous household equipment sales totaled 57.3 percent of the housewares market in 1995, a 12.5 percent increase in total sales from 1994. Telephone and accessories increased 156 percent, while outdoor equipment sales jumped 64.7 percent, and smoke alarms sales increased 36.6 percent.

Robinson pointed to carbon monoxide detectors as one of the best-selling household equipment items. He says sales tend to increase when news reports feature the detectors after carbon monoxide incidents.

Home safety products are also selling well at Bradlees, both carbon monoxide and smoke detectors in particular, Cohen says. "We've paid very close attention to our assortments," he says. "We're becoming more of a headquarters for products like these."

According to the NHMA study, total sales in the table-top/ cookware category decreased 10 percent, although certain areas such as glassware--up 18 percent--increased. And while appliance sales dropped nearly 4.5 percent, microwave sales increased slightly more than 18 percent.

Technology, like point-of-sales scanning and electronic data interchange, has played an important role for both retailers and manufacturers when it comes to improved housewares sales. "It gives us much more accurate information for us and our suppliers," says Robinson, referring to point-of-sales scanning.

While some retailers may consider the Internet as the wave of the future--indeed on-line consumers bought approximately $350 million in. various merchandise, including housewares and apparel, last year, according to the study--it has yet to gain a strong foothold at the discount store level. "We happen to believe that the retail facet of the Internet is out there to be exploited, but it's a ways down the road," Cohen says. "Retail Web sites are now more of a novelty than a pathway for customers."