Electrolux CEO Cites Changes in Consumer Behavior

Electrolux’s Samuelson: Consumers are becoming “more digital” and health conscious.

By Alan Wolf, YSN

The spread of COVID-19 has done more than put a crimp in vendors’ second-quarter earnings.

In presenting his company’s pandemic-period results, Electrolux President and CEO Jonas Samuelson also commented on the impact of the contagion on consumer behavior, and how that may affect purchasing patterns in the future.

In his Q2 report, the chief executive noted that “The increased time spent at home due to the pandemic has quickly changed consumer behavior.” Chief among those changes is an increased focus on high-quality products with relevant features and benefits. Within the appliance trade, that means shoppers are paying more attention to health and hygiene, resulting in greater demand for products that can “boost well-being,” such as washers, vacuum cleaners, air and water purifiers, and dishwashers, he said.

What’s more, consumers have become “more digital,” Samuelson observed, with online purchases growing significantly. “These changes in consumer behavior reinforce our strategy and we keep accelerating innovation to deliver relevant products and services, including further development of our e-commerce capabilities,” he said.

Looking ahead to the rest of 2020, Samuelson’s crystal ball was no clearer than others. “The pandemic situation remains fluid,” he observed, “creating an extraordinary degree of uncertainty over what the full global impact on demand will be for the second half of the year.”

How the back-half plays out “depends on several factors such as virus resurgences, the extent of additional restrictive measures and the effectiveness of the massive stimulus packages on consumer confidence and demand,” he continued. And while Electrolux expects “good demand” in the near term, fueled in part by pent-up demand from April and May and the effect of the stimulus programs, the company is forecasting soft sales overall in most of its main markets.

For the second quarter, ended June 30, net sales slid 17 percent to 29 million kronor despite a 3 percent boost in June, and the company showed a 62-million-kronor loss in operating income, compared to last year’s 1.2-million-kronor haul.

In North America, where cost-cutting and slight price increases helped limit a 173-million-kronor loss in operating income, sales fell 18 percent due largely to production constraints stemming from plant shutdowns, virus-related absenteeism, and manufacturing restrictions and supply disruptions in Mexico.

By way of comparison, total U.S. factory unit shipments fell 7 percent during the second quarter vs. an 8 percent drop last year, according to the Association of Home Appliance Manufacturers (AHAM).

Separately, U.S. rival Whirlpool said “very strong North America performance” and $100 million in cost cuts helped limit the impact of “significant COVID-related disruptions” during its second quarter, also ended June 30, which nonetheless drove net sales down 22 percent and cut net earnings by 48 percent year over year.