A battle is looming in the cooking appliance market with the head of one Australian retail operation tipping a brutal battle between Woolworth with food and a new relationship with US Company Lowes and Bunning’s set to take market share away from traditional appliance retailers.
The Woolworths move into appliances is set to come about via a takeover of Danks Holdings Ltd by Woolworths and US hardware giant Lowe’s who are the world’s second biggest home improvement retailer and a major seller of cooking appliances in the USA.
Woolworths who have formed a joint venture, Carboxy Pty Ltd, to make a takeover offer for Danks have said that they want to establish a presence in the Australian appliance market.
Richard Uechtritz the CEO of JB HI FI and appliance retailer Clive Anthony said that he saw a battle looming in the cooking appliance market and the decision by both Wesfarmers with their Bunning Chain and Woolworth via the US, Lowes partnership would shake up the Australian market.
“We have no plans to expand our cooking appliance presence via our Clive Anthony operation. Cooking Appliances at this stage is not a priority on our part. However it is an area that we have got to re think through”.
“The operators in this space are going to have to develop more female friendly stores you only have to look at the Lowes operation to see that. I believe that in Australia the suppliers will embrace Woolworths as they expand their cooking appliance business as there is a logical relationship between food and cooking appliances”.
Analysts are already tipping problems for retailers like The Good Guys, Clive Peeters and Retravision as both Woolworths and Bunning’s try to carve out market share in the appliance market over the next five years.
Vendors are also set to expand their cooking appliance offerings with both Samsung and Panasonic set to launch new cooking products next year. Mark Leathen, Head of CE, for Samsung Electronics Australia and the former head of whitegoods for the Korean Company said “We cannot rely on continued growth from flat panel TV’s. We are looking to expand our whitegoods offering next year as we recognise as a Company that the cooking appliance market is growing. We think that several vendors will be looking to expand their offerings in this area”.