- Appliance makers like Whirlpool and Electrolux are struggling to keep up with demand.
- After factory shutdowns because of the coronavirus earlier this year, they’re now facing a surge in sales to DIY-ers who are cooped up and seeking to upgrade their homes.
- It’s a strain being felt in all parts of the supply chain, from the manufacturers themselves, to shippers, raw materials suppliers, retailers, and more.
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Six months into the pandemic and supply chains are still in turmoil, but it’s not toilet paper this time.
Facing a winter at home, many Americans are leaning into home-improvement projects. That’s putting a strain on the world’s biggest appliance-makers who are now struggling to get refrigerators and washing machines to waiting customers.
Electrolux, the Swedish maker of kitchen and laundry appliances, told investors this week that the uptick in sales has it struggling to keep up.
“We entered the quarter with unusually low inventory levels, which have remained throughout the quarter despite high production levels, somewhat impacting our ability to keep up with the strong demand across all regions,” executives said on a conference call. “The increased time spent at home during the pandemic has resulted in more intensive use of appliances and higher share of household budgets allocated to home improvement. “
Whirlpool, which with Electrolux makes up the top two appliance-makers, added that a surge in new home construction was competing with DIY-ers.
“Looking forward, we remain confident in the strong demand for our products as our order backlog remains very high,” CFO James Peters said Thursday.
Beyond manufacturers, the strain is being felt by companies from Best Buy and other retailers, to shippers like JB Hunt and Union Pacific, and even raw materials suppliers like Dow, according to a Business Insider analysis of transcripts and filings from an already busy earnings season.
“It’s kind of the perfect storm of all these factors that are creating this demand, and brands like LG are ramping up to meet it,” an LG Electronics USA representative told NPR last month. He called the pent-up demand “unprecedented.”
It’s resulted in shortages and out-of-stock items at stores across the country, including independent shops and national chains alike. For Lowe’s, it’s meant a shift from in-store showrooms, to direct-to-consumer deliveries.
“Our pilots have proven successful in getting appliances and bulk product out of our backrooms into more centralised, local distribution or delivery,” CEO Marvin Ellison said in August. “And you’re going to see us accelerate that in the back half of the year going into next year.”