Even an appearance by Martha Stewart, the maven of housewares, was not enough to pump up this crowd.
Exhibitors and retail buyers at the 104th International Housewares Show are wary about the prospects for their industry in 2001 after coming off a miserable holiday shopping season.
Stewart’s keynote address Sunday, which featured slides of her kitchen renovations, did little to perk them up. As a buyer for discount chain Kmart Corp. put it, “I would say there is some caution out there.”
It’s easy to understand why.
The economy has put on the brakes after years of booming growth. Skyrocketing energy costs, especially in the Midwest, have eroded consumers’ disposable income. The timing also is bad for many people who were already feeling less wealthy because of the downturn in the stock market.
On top of disturbing economic trends, makers of household goods face a consolidating retail base dominated by giants, such as Wal-Mart and Home Depot, who make it nearly impossible for them to raise prices. Manufacturers lost two more of their outlets in the last month with the demise of Chicago-based Montgomery Ward & Co. and Bradlees Inc., a discount chain in the Northeast.
So there may not be much demand–at least in the first half of the year–for the expensive, high-tech gadgets and big-ticket appliances, such as an Internet-enabled refrigerator for $10,000, on display this week at McCormick Place. In a soft economy, even sales of everyday items, such as dishes and storage containers, are at risk.
“Housewares is not brain surgery,” said Sid Doolittle, partner with McMillan/Doolittle, a Chicago retail consulting firm. “It goes to sleep during a slowdown.”
There could be a silver lining for the industry, however, in the economic downturn. Thirty-year mortgage rates fell below 7 percent last week for the first time in nearly two years, generating optimism that lower interest rates would spark a boom in the housing market and give consumers a reason to shop again.
Indeed, officials at the International Housewares Association say it’s too early to predict gloom and doom. Still, they are expecting the pace of growth in the $67 billion industry to slow from an estimated 5 percent last year to 3 percent to 4 percent in 2001.
For the first time in years, retail merchandising managers gave their housewares buyers marching orders to be conservative. “Buyers are hesitant,” said Sara Coslett, vice president of Novelty Crystal Corp., a Groveland, Fla.-based marketer of acrylic products. “They don’t know whether they can or cannot buy.”
Retailers are gun-shy coming off one of the worst holiday selling seasons in a decade. Consumers reined in their spending, dragging down December sales at many of the nation’s largest retailers.
Now, retailers are looking to better manage their inventories to improve profit margins, Doolittle said. That means making smaller purchases instead of one big buy and cutting back on fringe items.
Smaller or lesser-known manufacturers could find it harder to get space on store shelves. But that’s not going to stop them for trying. Innovation is the key, said Tom Daniels, president of Back to Basics Products Inc. of Draper, Utah.
His company has come up with a twist on an old staple, the blender, that’s designed to make fruit smoothies. Its version, the Smoothie Elite, comes with a dispenser and stirring rod fixed to the top of the pitcher. It retails for $59.95.
Exhibitors are trying to find other reasons to remain optimistic. Gary Dean, for one, figures consumers will cook more and eat out less if their pocketbooks are lighter. So Dean, national sales manager of Trudeau Corp., a Canadian cookware company whose U.S. headquarters are in suburban Woodridge, is showing off the company’s fondue sets. A 32-piece set has a suggested retail price of $129.
“When people are not buying big-ticket items, that normally helps our business,” Dean said.
