In this strange time we’re living through, there have been many changes to the way we live, both big and small. The global isolation has led to everything from rapidly falling air pollution to dramatic increases in loneliness, anxiety and depression. However we at Kagoo have also noticed some changes in white goods and electricals over the last few months, which have culminated in product shortages and price increases.
Demand is sky-high
The global lockdown has meant that electrical demand has shot up since February, as people look for alternate means of living, new distractions and a respite from being stuck inside. Some companies have seen “50% to 100% increases for products including appliances, home and garden, toys and sporting goods.” Cooking has been a large part of that - with restaurants shut and long queues at shops, more and more people have been cooking at home. This has led to an enormous swell in demand for certain kitchen appliances - Bloomberg has reported a gigantic 462% increase in sales of electric pasta makers, and a “sixfold increase in bread makers”.
The current baking trend has no doubt helped spur the push for breadmakers, mixers and pasta makers - it appears that the whole of the UK has become obsessed with sourdough! However food storage has also been a hot topic - the ‘Association of Home Appliance Manufacturers’ reported a 45% increase in freezers over the last few months, as people scrambled to stockpile food.
Here at Kagoo we have seen a clear increase in not just baking and kitchen goods, but also high-end televisions - with so many people being stuck at home, watching Netflix and trying to ignore everything has become a national pastime!
Supply is down; Transport networks heavily disrupted
The Covid-19 virus is having an unprecedented effect on global production - with factories and businesses across the world having to shut down and furlough staff as a protective measure. This has had two big knock-on effects - the supply of new appliances has fallen dramatically, and the global infrastructure for transporting components and products has been hamstrung.
The giant Chinese factory cities, such as Shenzhen & Guangdong, were closed through most of the first part of 2020. This has meant a break in the supply chains for many of the vital parts for making the electricals and appliances now in heavy demand. The shutdown has created a shortfall of components, hampering manufacturer’s ability to create new appliances.
The global transportation infrastructure, meanwhile, has been hit heavily by Covid 19. The shutting of borders across the world and the reduction of air transport has limited the ability to move freight across the world. This has led to an 80-90% reduction in capacity for freight transport.
Component & shipping costs have risen
Finally, while many of the large Chinese factories have restarted now, the shutdown had a secondary effect - pushing up the cost of components for building appliances. Shipping costs have also risen sharply due to the difficulty of moving products, and the increased pressure on a smaller workforce of cargo planes.
Result: Appliance prices have increased 8-10%
All of these problems have 2 ultimate effects:
- There is a heavy shortage of kitchen appliances and white goods
- The prices of these affected goods has risen sharply in the past 4-5 months
The increased component and shipping costs, plus extreme demand from bored quarantined households, has meant prices for appliances have risen by as much as 8-10%. We haven’t seen this change equally across all appliances - small electricals such as breadmakers, fryers and mixers have been hit the worst - but we can still track an increase in prices from February onwards.
Some examples of price rises we’ve seen at Kagoo include:
This is on top of the price rises in the secondhand market for affected appliances - where products like health fryers and pasta makers are commanding a high price, since merchants like Currys and AO are sold out of new stock. eBay and Amazon are also still combating price-gouging by profiteers trying to make a quick buck out of this global crisis.
Things will recover, but it will take time
In the final analysis, this is a troubling time, but it will pass. Already we are seeing shops beginning to open, factories restarting, and life cautiously beginning to get back to normal again. It’s hard to accurately predict when prices will start to return to normal again for electricals, or when stock levels will stabilise - realistically it may take months, but normality will return. In the meantime, unfortunately we will all have to grapple with product shortages if you want to kickstart your sourdough career… or pay a premium for an eBay breadmaker.
If you do find a product you want to keep an eye on, set up a price alert on Kagoo - we’ll send you a mail as soon as we get more information about stock levels or price drops!
To end on a more positive note, It’s a fair assumption that the standard large sales of the Black Friday and Christmas periods will appear as usual, and they may be bigger than ever! Stored will be desperate to grab as many customers as possible to make up for lost time in the first half of the year, and so the deals will get very competitive - of course Kagoo will be there to bring you the biggest and the best deals as soon as they appear!