Executive Summary

The UK household appliances (white goods) market encompasses any electrical appliances used in the kitchen or utility room in the home. It therefore includes home laundry appliances, dishwashers, refrigeration equipment, cooking equipment and microwave ovens. The market was worth £2.67bn in 2000, an increase of 1.2% on the previous year and 19.6% up on 1996. Volume sales also grew between 1996 and 2000, by 30.5%, to reach 11.7 million units. Growth stood at 4.8% over the previous year.

The largest white goods sector in 2000, in volume terms, was that of microwave ovens. This is due to the very low-entry level prices of around £50, allowing more buyers into the market and causing a sharp increase in household penetration. The washing machines sector was the second-largest in 2000. This is one of the more mature market sectors and there is inevitably a higher level of replacement purchasing as consumers trade up. It is also the case that washing machines tend to be less reliable than other appliances, as they are often used intensively and also have more moving parts to go wrong. There is, as a result, a higher degree of distress purchasing in this sector — new machines are bought to replace a broken down model that cannot be economically repaired.

By value, the largest white goods sector is that of washing machines. The next most valuable sector is that of electric cookers (free-standing and built-in). The lower unit prices in the microwave ovens sector means that they account for a much smaller share of the market in terms of value.

The white goods market in 2000 continues to be dominated by a small number of multinational manufacturers, that own most of the key brands in the market and have production facilities and other operations all over the world. The trend towards concentration of supply in the white goods market has continued as the market has remained competitive. Economies of scale mean that smaller companies find it harder to compete in the mass market. In the late 1990s, there was a steady decline in the number of independent manufacturers and suppliers of electrical appliances for the white goods market, with many being swallowed up by their larger competitors. The more global companies — such as Electrolux Household Appliances Ltd, Merloni Domestic Appliances Ltd, Whirlpool (UK) Ltd and BSH Home Appliances Ltd — remain the most important suppliers of household appliances in the UK market. These companies generally own a stable of brands positioned across all the major white goods sectors. They have the resources to continually develop new products and improve their ranges.

Between 2001 and 2005, further but slower growth is forecast for the white goods market.

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