Sears to add appliances, lower prices

By Lorene Yue
Chicago Tribune

CHICAGO — In an effort to stop customers heading to rivals to buy appliances, Sears, Roebuck & Co. said yesterday it will add more products and lower prices.

The strategy to protect the crown jewel of Sears' retail operation — the largest business at its full-line stores — comes as the Hoffman Estates, Ill., company's traditional hold on appliance sales has started to slip.

For decades, Sears has been a stalwart in the home appliance industry selling close to 9 million washers, dryers and refrigerators each year. The company is the only retailer that carries all six top national brands.

But Sears' competitors — notably home-center giants Lowe's Companies Inc. and Home Depot Inc. — have started taking significant market share for the first time in recent memory. Lowe's and Home Depot, which respectively rank second and third in appliance sales, stole roughly 2 percentage points of Sears' market share in appliances last year.

"Sears is encountering much more competition and it can no longer be as haughty about it," said Walter Loeb, a retail consultant in New York. "While consumers still trust the brand, it is no longer the same as it was three years ago and Sears needs to recapture the momentum they are losing."

Last year, Sears share slipped to 39 percent while Lowe's share increased to 13.7 percent and Home Depot to 6.4 percent.

To combat its declining share, Sears plans to lower prices on key items to match its competitors, make more appliances available for immediate delivery and adopt an aggressive advertising campaign to remind consumers of its price-matching policy that gives buyers an additional 10 percent rebate.