Bright lights, big boxes
No surprise here: the warehouse home center channel dominates the interior and exterior lighting category, as well as ceiling fans, a category where big boxes enjoy a whopping 73.5 percent dollar share. But based on consumer data from NPD Research, the story in these bright categories seems to be a move to the middle price points from the discount/mass merchants on one extreme and the specialty lighting and electrical supply stores on the other.
According to research, the average price paid for total lighting was $44.82 in 2007, up from $40.22 in 2006. Broken down by channel, consumer spending at mass merchants jumped $6.20 to $28.88, while consumer spending at lighting and electrical supply stores declined fro m $88.29 to $74.50.
“Specialty retailers seem to be coming down, while warehouse clubs and mass merchants are going a little upscale,” said Mark Delaney, NPD Group’s director of home improvement. “These shifts may be driven by competition, or just a result of the overall economy.”
Energy efficiency has played an increasingly large role in the sale of lighting across the country in recent years, but NPD’s research shows an opportunity for Energy Star or other energy-focused marketing programs. Consumers who purchased 42.4 percent of lighting units did not know if their purchases were Energy Star compliant.
“To me this says that there is an opportunity for Energy Star or the individual retailer or manufacturer to provide education on their products, or be more aggressive in promoting the energy efficiency story,” said Delaney.
In the ceiling fan category, there was a slightly higher connection to Energy Star, but still consumers purchasing 39.9 percent of items did not know if their lighting carried the Energy Star label.
Environmental friendliness also is playing out in the exterior lighting category in the form of solar lighting. This category jumped from 17.5 percent of dollar share in 2006, to 22.0 percent in 2007. In addition to the energy savings of solar, the technology has improved in recent years. Still, the leading segment of exterior lighting remains the exterior wall mount segment.
Perhaps because of pressure from the big boxes, lighting & electrical supply stores appear to be selling less expensive products. While dollar share in this specialty channel declined to 9.2 percent in 2007, unit share increased to 4.1 percent.
Overall, the exterior lighting market has increased by 5.7 percent year over year.
Of the five income categories tracked, the highest ($100,000 plus) was the only category to show an increase in year-over-year unit share–from 25.3 percent to 29.9 percent.
NPD’s Consumer Tracking Service is based on monthly tracking of 30,000 opt-in respondents in 70 categories. The data above reflects the period from January 2006 to December 2007.
Weyerhaeuser reports loss in fourth quarter
Federal Way, Wash.-based Weyerhaeuser reported a net fourth-quarter loss of $63 million, swinging from earnings of $507 million in the same period last year. Sales were $3.9 billion, down 23.1 percent from $4.8 billion last year.
For the year, the forest products company had net earnings of $790 million, up 74.4 percent from $453 million in 2006. Sales dropped, however, to $16.3 billion from $18.7 billion last year, a decline of 12.8 percent.
Steven Rogel, chairman and CEO of Weyerhaeuser, characterized 2007 as a “challenging year” and said the company has been implementing ongoing improvements to its packaging business, while implementing “growth strategies” in its timberlands business.
“The continuing erosion of the U.S. housing market created very unfavorable market conditions for our timberlands, wood products and real estate businesses,” Rogel said. “Despite difficult market conditions, which we expect to continue through 2008, Weyerhaeuser remains focused on managing through the downturn.”
The company’s real estate business took the largest hit, with earnings falling 52 percent. Orders were down 19 percent, and the company’s backlog of homes sold, but not closed, dropped 35 percent.
Weyerhaeuser is one of North America’s largest diversified wood products companies.
NAR weighs in on Freddie Mac, Fannie Mae reform
The National Association of Realtors has submitted a position to the U.S. Senate Committee on Banking, Housing and Urban Development, supporting increased loan limits in government-sponsored enterprises (GSEs) Freddie Mac and Fannie Mae.
Reform to the two main government-sponsored lending organizations has been a topic of debate in light of the damaged subprime mortgage market.
Proponents of raising loan limits say it is a needed stimulus for the housing market. Opponents say giving the lending organizations a route to the “jumbo” loan market could be dangerous without additional safeguards.
Currently, a cap of $417,000 exists on loans issued by the GSEs. The NAR and other proponents of the stimulus plan support raising the GSE lending limit to $625,000.
The NAR submitted testimony to the HUD committee saying, “Fannie and Freddie are our partners in the housing industry and are important to stabilizing and strengthening the housing market.”
The group said the package could help “as many as” 500,000 jumbo loan borrowers to refinance. Additionally, the NAR says a higher rate limit could allow a large number of borrowers to enter the home buying market.