Household Appliance Prices Soar In Oz After Pandemic Stock Shortage
The price of household appliances in Australia climbed significantly in the last six months due to pandemic stock issues, a new report claims.
According to the ABC and Citi data, prices for major appliances rose by 8.9 per cent in the September quarter and by 9.9 per cent in December – a sharp incline from the average long-term price inflation of 0.6 per cent.
Small appliance prices climbed by 4.5 per cent in September and 8.6 per cent in December too.
This is largely in part to suppliers and retailers minimising the level of discounted products amid a surge in demand and worrying stock shortages during the height of the COVID-19 pandemic.
“It’s the law of economics at work. Demand is high and supply in some areas is a bit constrained, so prices have gone up,” said Citi’s head of research, Craig Woolford, told The Australian Financial Review.
“Typically in retail, there’s an abundance of supply globally so there are high levels of discounting activity at certain times of the year.”
According to the data, AV and IT appliances, tools and furniture experiences the biggest increase in pricing.
Higher prices and increased demand allowed for retailers in the consumer electronics and homewares industry to achieve stellar sales over the last quarter, the Citi report states.
JB Hi-Fi sales jumped by 21 per cent in the December quarter, while the Good Guys enjoyed a 26.4 per cent rise in the same period.
Harvey Norman also achieved bumper sales in the same period thanks to the stock supply shortages and increased demand for furniture.
“Appliances, audio-visual, IT and furniture all recorded much higher inflation than average,” Mr Woolford added.
“The inflation rates are 5 to 10 percentage points higher than normal and would account for about one-quarter of the elevated sales growth rate in household goods.”