Appliance Price Inflation 2021: Latest CPI #’s Don’t Tell Full Story

Appliance Price Inflation 2021: Latest CPI #'s Don’t Tell Full Story

For most of us, appliance shopping means something’s gone wrong. Your dishwasher or refrigerator or oven broke down, and you can’t wash dishes or cook dinner the way you need to. At best, it’s an inconvenience. At worst, it’s a hit to your budget that you can’t afford.

That’s during normal times. Right now, thanks to the pandemic, increased demand and limited supply are making it harder to find the dishwasher or refrigerator you need. When you do find one, it’s most likely going to be on backorder for weeks or months. And the price tag is probably going to be bigger than you expected—much bigger than last time.

Watch our exclusive video on how to save on appliances during price hikes.

You’ve probably heard how inflation is driving up the cost of everything from pork to building materials like lumber. Inflation is escalating kitchen and laundry appliance prices too. According to the latest Consumer Price Index numbers from the U.S. Bureau of Labor Statistics, major appliances, including ranges, dishwashers, and refrigerators, cost 12 percent more now than they did this time last year. Washer and dryer pairs are up about 18 percent. But that’s not the whole story.

“We’ve definitely seen a major increase in appliances prices. Our average cost to buy these products at wholesale has increased by well over 10 percent since last year,” says Metin Ozkuzey, President and Cofounder of Designer Appliances. “By comparison, from one year to the next, that increase has historically been closer to 3 percent.”

Just about every brand we sell, from household name brands like GE and Whirlpool, to luxury brands like Sub-Zero and Wolf, have increased their prices across the board,” adds John Carey, Cofounder and Vice President of Designer Appliances.

You’ll see that jump reflected in the price you find in the store and online. In reality, prices could be 20 percent higher—or more in some cases—compared to 2020.

Read on to learn which appliance discounts have disappeared, what’s sending the base prices soaring, and why they’re likely to stay that way. And keep going for expert tips to help you make a smart purchase now. Don’t worry: If you’re a little flexible and follow this advice, you can still find what you need.

Are you researching inflation for a story you’re writing? Reach us at pr@realnapalm.com. We’d be happy to comment, provide quotes, and share our proprietary data.

appliance inflation affects multiple categories
Inflation is driving up prices from dishwashers to refrigerators

The 4 Types of Discounts the Pandemic Killed

Prior to 2020, appliance shopping was all about promotional holidays like a Labor Day or Black Friday. You might time your kitchen remodel or plan to replace an older fridge around that time of year, to make the purchase a little easier on your pocketbook. These promotional holidays were just one of many ways to save when shopping for appliances. There were three more biggies—and all of them are disappearing now.

1) No more doorbuster promotional holidays (Memorial Day, Labor Day, Black Friday, etc)

As we just mentioned, seasonal sales used to be the best way to save on popular appliances. To drive demand, brands would offer discounts range from 10% to 40% or more off popular models. These sales are non-existent during the pandemic. Demand is already high and supply is already low, so there’s no need to drive more customers through the door.

Take GE for example. For GE’s upcoming Labor Day sale in September, only about 30 of their models are marked with a promotional discount… representating a measly 3% of their total catalog. Contrast that to Labor Day 2019 when GE was discounting over 300 models, or about 30% of their catalog. Frigidaire and Electrolux have followed suit, as have Whirlpool, Maytag and Kitchen-Aid.

2) Say goodbye to price competition amongst retailers

Many manufacturers set two prices: the MSRP, or manufacturer’s suggested retail price, and the MAP, or minimum advertised price. The MSRP is the price you see on the manufacturer’s website. The MAP is technically the lowest price that a retailer can advertise at. However, in the past, some manufacturers used to be flexible, letting retailers advertise their products for up to 10 percent below MAP.

“Big retailers like Home Depot and Lowes thrive on selling huge volumes of appliances. They advertise at the rock bottom price of MAP – 10% and the rest of us in the industry follow suit to stay competitive” says Carey.

Today, many brands have changed their policies and are requiring retailers to stick to MAP without the 10% discount. This has helped to increase the margin for individual retailers, but it’s a direct impact to the price you’ll pay as a shopper. In short, compared with 2020, the base price of the appliance you need has already gone up by 10 percent.

3) Good luck trying to wheel & deal

Sometimes you can negotiate at the store and get an additional discount. In competitive markets like the northeast, you occasionally could bring the price down a bit more this way. Negotiating just isn’t an option right now.

4) Remember mail-in rebates? Yea… those are gone too

After buying your new dishwasher or refrigerator, you used to be able to redeem mail-in rebates (“Buy a washer and dryer and get $100 back!”) for an even deeper discount. “In the past, these were a huge driver of sales,” says Carey. “Customers waited for them to buy. These mail in rebates have disappeared over the past two years.” That’s especially true for individual appliance sales, adds Ozkuzey. The rebates you’ll find today apply mostly to packages, or full suites of kitchen appliances from a single brand, as opposed to an individual dishwasher or refrigerator.


Data Points: Specific Examples of Price Increases On Appliances

This Bosch dishwasher is one of our best sellers and is consistently a top rated model from popular consumer rating agencies.

2019 Pre-Pandemic Pricing

  • Everyday price: $894.10
  • Mail-in rebate: -$50.00
  • Readily available and delivered in about 1 week
  • Total price delivered: $844.10

During Pandemic Pricing

  • Everyday price: $999.00
  • Mail-in rebate: none
  • On backorder for at least 3 months
  • Total price delivered: $999.00

The Bosch SHPM65Z55N Dishwasher costs on average $154.90 (~18%) more in 2021 than it did in 2019.

This GE refrigerator is also a top pick on consumer rating agency websites.

2019 Pre-Pandemic Pricing

  • Labor Day promotional price: $1,998.90
  • Mail-in rebate: $50.00
  • Readily available and delivered in about 1 week
  • Total price delivered: $1948.90

During Pandemic Pricing

  • Everyday price: $2,333.10
  • Mail-in rebate: none
  • Believe or not this is currently in stock and ready for delivery!
  • Total price delivered: $2,333.10

The GE GFE24JSKSS refrigerator costs on average $384.20 (~20%) more in 2021 than it did in 2019.

Are you researching inflation for a story you’re writing? Reach us at pr@realnapalm.com. We’d be happy to comment, provide quotes, and share our proprietary data.


So… What’s Driving Appliance Prices Up?

Right now, demand for kitchen and laundry appliances is super high and the supply is super low. That rarely happens at the same time, but it’s happening right now. That’s causing manufacturers to raise their wholesale prices which in turn increases the price you’ll pay at retail. Let’s take a look at the market forces causing them to put this extra squeeze on your wallet.

Short Supply

The pandemic has created many inefficiencies for appliance manufacturers

Unpredictably high demand caught manufacturers off guard

To save on warehousing costs and avoid having too much inventory sitting stagnant, years ago many appliance manufacturers moved to a production system called “just in time” manufacturing.

Popularized by Toyota, this system matches production to forecasts for future demand based on prior years sales numbers. As demand came to a skretching halt in March and April of 2020, manufacturers hit the panic button and predicted a decline in sales (this happened in the lumber and building supplies industries too). However, the exact opposite happened. Demand started dramatically increase and the lack of excess “just in case” inventory meant manufacturers were unprepared to handle the overwhelming volume of sales that were to follow.

Delays in getting the raw materials needed to manufacturer appliances

In addition to having no excess inventory available, manufacturers have yet another problem. They’re short on the raw supplies needed to make the appliances. From insulating foam, to microprocessors, the entire supply chain has been turned upside down and is unable to keep up with demand.

Pandemic related lockdowns

Government imposed lockdowns have forced serveral manufacturers to shut their factories for weeks or months, which has had an obvious negative impact on the amount of appliances they are able to manufacturer.

Labor shortages

Understandably so, workers are hestitant to come back to work, either for fear of getting sick or because they need to care for a family member or school age child whose school is closed. Luckily stimulus checks and increased unemployment benefits have made life easier for these people, but it’s also made it harder for manufacturers to get employees back to work or even attract new talent.

Logistical delays

Getting parts and finished goods where they need to go has been a real challenge. A lack of labor in the trucking industry has lead to a shortage of drivers able make deliveries. Also, delays at major ports have caused the receiving of cargo containers to come to a skretching hault.

Pent-Up Demand

In case you haven’t experienced this yourself or heard about it from a frustrated friend or family member, the real estate market is incredibly hot right now. People are taking advantage of all-time-low mortgage rates and all-time-high sale prices to move or relocate.

Many families who are moving do a home renovation project before they settle in—and, more often than not, those projects require kitchen and laundry appliances. They may have extra income from not taking vacations or going out to the movies or dinner, and they’re investing in their homes.

People who aren’t moving are doing the same thing. Those who’ve been lucky enough not to have their income affected by the pandemic are upgrading the appliances they have.

On top of that, there’s a greater need for replacement appliances now, because people are putting more wear and tear on them while working and cooking mostly at home.

“If you open your fridge door 30 percent more every day, that causes the compressor to kick in more often,” says Carey. “And that can lead your fridge to break down.”


The Customer Experience is Suffering

If you need appliances, you are going to pay more for them today then you would have 1-2 years ago

With backorders stretching out for months, manufacturers have no good reason to offer any of the old incentives, says Ozkuzey. They don’t need to spend money to sell their products; they’re not even able to fulfill the orders they have on the books. So you’re basically getting hit by a double increase. The old discounts have disappeared, and the base price (which nobody ever paid before) is going up.

“At the end of the day, a washer dryer pair that would’ve cost you $2,000 in total in 2019 could in all likelihood cost you around $2,400 today when you factor in the increase in MSRP, the lack of discounting from the retailer, and the lack of rebates,” says Carey.

For people renovating a full kitchen, the delay on appliances may hold up your entire project

In some cases we are seeing backorder delays that can range anywhere from 3-6 months which can exceed the lead time of new cabinets.

And even if you’d not ready to take delivery and your appliances become available, retailers may force you to take store the appliances in your garage, in multiple deliveries

Retailers are running out of warehouse space and in turn need to get products out the door as quickly as possible. If you are unable to accept a full or partial delivery, some retailers may have no choice but to give your appliances to the next person in line.

Return policies are becoming less lenient

Manufacturers are getting pickier about returns. In the past, they were pretty lenient about taking back damaged items. “We find that they’re accepting fewer such returns today,” says Ozkuzey. “We in turn are being stricter on the type of returns we allow, since we know that the manufacturer will likely deny our request.”

Are you researching inflation for a story you’re writing? Reach us at pr@realnapalm.com. We’d be happy to comment, provide quotes, and share our proprietary data.


Is Appliance Price Inflation Transient or Permanent?

Asked about whether prices could stop going up or even go down once the pandemic ends, Ozkuzey and Carey agree that’s unlikely. “We think that the bulk of these increases will be permanent,” says Ozkuzey. Once supply catches up with demand—”by the third quarter of 2022, we hope,” says Carey—you’ll see the kind of sales that happened in 2019 again.

“But appliance makers are not known for going backward in pricing,” says Carey. “Our wholesale price has jumped up, and we expect it to stay there.”


Our Advice for Appliance Shoppers

  1. If you have an older appliance and are concerned it’s beginning to break down, start looking for a replacement now. “Three to four weeks is the shortest wait time we’re seeing right now for almost all appliances,” says Carey.
  2. If you’re shopping for high end appliances, order them as soon as you can. “Lead times are up to six months,” says Ozkuzey. You don’t want your appliances to hold up the whole project.
  3. Some appliances are out of stock pretty much everywhere. When you see it showing up as in stock, double check before you click buy. It could be too good to be true.
  4. Ask about floor models. If you’re lucky, they might be up for grabs.
  5. If you need a new laundry set, try to wait for a retail holiday, like Labor Day or Black Friday. “The deals won’t be as significant as in the past, but you could still find some savings,” says Carey.

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SIDENOTE. This post was last modified on August 16, 2021. However, we regularly update our content as we test more products and new models are released. We also listen to the feedback of our customers and make changes to our product recommendations based on their experiences. So don’t be surprised if you see some old comments below! Since reader comments contribute to the topic, we have decided not to delete them.

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