Monday, October 11, 2010

Durable goods spiking.



This weekend I went into Orchard Supply. Which is one of California's largest chain hardware stores. OSH as it's commonly called - is owned by Sears. It seems like twice a month now they hold a sales tax free weekend and I needed a fan.

When we walked in, I was surprised they were pulling out their "tool coral", and relocating it. Mr S. was curious enough to ask what they were putting in to replace the tool area.

Appliances - the guy said.

This struck me as very odd, as this seems like a very crowded space right now. Remember this summer when I was a little taken back that Best Buy had started selling appliances? Here.

We already have a Lowes, HomeDepo, Sears, Best Buy and many small appliance shops. Last year, Lowes ripped out most of their kitchen design space to load it up with more appliances before the whole cash for appliances thing.

Appliances must have a very high margin, because that is a lot of real estate in a store to just be sitting around.

Interestingly enough, we wound up stopping by Best Buy as well to look at the product cycle of something else. So, I had to go see what was happening with the appliance area. I was a little surprised to see that everything was marked down 10-15%. It has only been 4 months since they put all that crap in there.

Granted, Pacific Sales has a really horrible reputation. I thought they were leasing the space from Best Buy - but it looks like Best Buy owns this company.

You just don't need to buy appliances that often. So the idea that all these stores are loading themselves up with this inventory is odd.

2 comments:

stutefish said...

I admit I'm curious: What product cycle of something else were you looking at?

she said: said...

Video cards. The canaries in the coal mine.

I was also looking to see if any of the rumored non Apple tablets had hit the consumer market yet. It seems like a bunch of companies are missing the Christmas window this year. Which isn't helpful.

Maybe they are all waiting to release at CES now.