Top appliance makers Whirlpool and Electrolux are raising prices to pass soaring raw material costs on to customers, but their attempts may not pass muster with bargain-hungry shoppers.
According to Reuters, both companies reported quarterly profits that fell short of estimates as they grapple with tepid demand in major markets like the United States and Europe.
Many analysts questioned the timing of the move, especially since consumers in the developed world continue to look for incentives to buy expensive goods like appliances.
Korean manufacturer Samsung has not announced increases and appears to be planning to hold existing prices. Still, Whirlpool’s chief executive, Jeff Fettig, insisted it was not “economically feasible” for Whirlpool to remain indefinitely in the promotional mindset it adopted for the holiday season and last year in general. “For 2011, we expect positive but uneven demand levels around the world,” Fettig said, adding the company still hoped to expand operating margins in the year through price increases and boosts in productivity.
LG Electronics does plan an increase as well. The planned price increase matches moves announced earlier by Whirlpool and Electrolux.
Whirlpool has shut plants, cut jobs and moved some manufacturing to lower cost centers like Mexico. It has also started using common parts across its lineup of dishwashers, refrigerators and washing machines.
Electrolux, which sells under its own name as well as the Zanussi and Frigidaire brands, is planning to raise prices by 8 percent to 10 percent in North America starting in April and gradually in Europe and other markets. The move comes as manufacturers around the globe plot price increases to offset higher materials costs and regain ground lost in the recession. Electrolux Chief Executive Keith McLoughlin said the rise in raw materials’ costs had been across the board.