Electrolux CEO: Inflation Expected to Ease This Year

By Alan Wolf, YSN

Electrolux CEO Jonas Samuelson believes current inflationary pressures will subside later this year now that the brunt of the pandemic is behind us.

Speaking to Financial Times, Samuelson said Electrolux had seen the “cost and inflationary pressure on everything accelerating,” but had managed to pass along the higher costs of raw materials, freight and semiconductors to consumers. The latter two in particular had become “super expensive,” he said, and “there just isn’t enough flex or margin in our business to be able to absorb [the cost increases].”

Samuelson expects both inflation and consumer demand to ease this year as COVID vaccinations become more widely available and consumer spending shifts from goods to services. In the meantime, Electrolux continues to plug away at production.

“It’s not that we’re struggling to keep our factories going; it’s more struggling to keep overtime going,” he told the newspaper. “It’s a nice problem to have, but it doesn’t feel like a nice problem to have when you can’t meet customer needs.”

Samuelson’s comments came as the U.S. Labor Department reported a 5.4 percent increase in the consumer price index in June, marking the highest inflationary surge in nearly 13 years. Much of the increase stemmed from higher prices for used cars, air fares, transportation and gasoline, the agency said.

Samuelson added that Electrolux is experimenting with new business models that would help avoid the supply-chain bottlenecks that stemmed from just-in-time manufacturing during the pandemic. He said the company already has separate production flows for most appliances in North America, Europe and Asia, and is increasing the use of common components and product modules to reduce production complexity.

Electrolux is also considering alternatives to appliance ownership, such as rental or subscription options, and sees a major opportunity in improving the “repairability” of its products to help consumers decide whether to repair or replace their devices, he said.

Hat tip to Financial Times.