Electrolux 2004 Annual Report Download - page 7
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A growing share of disposable household income is devoted
to the home, and in particular to the kitchen. Many consumers
are interested in food and food preparation, and kitchen design
and equipment have become a way of expressing their per-
sonalities. Life-styles, fashions and trends in decoration are be-
coming more important even for kitchen appliances. And for many
consumers, esthetic values are just as important as function.
Products are becoming more intelligent as they comprise
more electronic systems. Consumers want products that are
not only more useful, but are also easy to use and require less
looking after – products that provide greater convenience and
reliability in the home.
These trends have brought exciting opportunities to our
industry. At the same time, pressure for change is being
generated by greater globalization and more competition from
producers in low-cost countries, as well as by a trend to
bigger and more international retail chains.
Stable demand
About seven out of ten appliances are purchased when the
existing appliance breaks down. The replacement market is
therefore a steady basis for demand. The others are pur-
chased mainly when people move to a new home. Demand
is affected by housing starts, trends in disposable household
income and the number of households. Consumer confidence
is also an important factor.
The degree of saturation, i.e. the share of households
that have cookers, refrigerators and other appliances, is
high in our traditional markets in Western Europe and North
America. Saturation is considerably lower in both Eastern
Business environment
What’s happening in
our industry?
Hans Stråberg
President and CEO
Europe and Asia, and these markets also show high growth
within most product areas.
High growth in specific segments
Although some product categories are highly saturated, certain
segments or products can still show high growth. For example,
frost-free freezers in Sweden have shown annual growth of
150% in the past two years, while the freezer product cate-
gory as a whole has grown by only 5%. Other examples of
products with high growth in many European countries are
induction hobs and large side-by-side refrigerators. Built-in
products also show substantially higher growth than the overall
market in several countries and within certain categories.
96 97 98 99 00 01 02 03 04
Penetration of product categories in Europe
Cooker & Oven
Tumble dryer
Dishwasher
Freezer
Refrigerator
Washing machine
Shipments of core appliances in Europe and US
Europe,
excl. Turkey
USA
Million products
140
120
100
80
60
40
20
0
Western Europe
Eastern Europe
%
100
80
60
40
20
0
Shipments of appliances have been stable in both Europe and the US.
The graph shows the share of households that owns a refrigerator,
freezer etc. in Western Europe and Eastern Europe.