Appliance makers cooking up price hikes

Major appliance makers are planning to raise prices again this year to cope with rising costs of oil and other materials, industry observers said Tuesday.

"There's little doubt in my mind that you're looking at some nice price increases on their way," said Warren Mann, executive director of Marta Cooperative, which represents independent stores that sell appliances. "It's pretty definite."

David MacGregor, an analyst with Longbow Research, said in a research note that virtually all major manufacturers with the exception of Whirlpool have announced price increases effective June 1. Last month, he upgraded stock ratings on Maytag and Whirlpool, citing the prospect of higher prices.

And Eric Bosshard, an analyst with FTN Midwest Research, said this week that he would not rule out import brands raising prices as well.

Several appliance makers declined to comment or did not return calls for comment on the expected price rises. Maytag Corp., Whirlpool Corp. and Sweden's Electrolux are due to report earnings this week.

The major appliance companies announced price increases of at least 5 percent this year to offset higher costs of steel and other metals, bucking a trend of declining appliance prices in past years.

Jay McIntosh, Americas director of retail and consumer products for Ernst & Young, said that in addition to metals costs, appliance makers are now pressured by higher energy costs to ship goods made in lower-cost areas.

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"One of the disadvantages to moving production offshore is it does make logistics a bigger part of the total costs," McIntosh said.

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Despite concerns that higher appliance prices will slow consumer spending, Mann said his cooperative's business was up 3 percent or 4 percent in the first quarter of this year.

He added that the second round of appliance price increases may help cement the first one earlier this year.

"The fact that manufacturers are prone to come back just a few months later with another price increase means the first one might have been a little timid," he said.