Arctic monitors sales in 1,000 partner stores every month

The overall decline in home appliance sales and the 14% drop in turnover to 80 million euros in the first half have made Artic shift to a risk management policy, which entails weekly sales forecasts, and verification of partner stores.

“Sales people go to home appliance stores every day. More than 90% of the 1,200 stores that sell electronics in Romania are visited every month,” stated Monica Iavorschi, 34, Arctic’s general manager. This is intended to help the manufacturer identify the products in highest demand and optimise the product mix on shelves.

“It is still difficult to make a forecast, but it is much better than in the previous months. It is all up to budgets, consumer loans and more recently about the negative effect of unemployment,” Iavorschi says.

The stores with the highest sales are the almost 200 stores held by Altex, Domo and Flamingo, followed by the 200 supermarkets, hypermarkets and cash & carry stores. There are also the medium-sized networks, the regional networks and independent stores.

Arctic sold approximately 90,000 refrigerators and washing machines through the buy-back schemes in the first six months, whereby it granted a 150 RON voucher for those buying a new appliance if they turned in an old one.

The volume sold through such campaigns conducted in specialist retail chains or hypermarkets accounts for 40% of the 225,000 units sold on the domestic market.

The manufacturer posted a 14% sales decline in the first half, to 80.3 million euros, as a result of a 28% drop in demand on the domestic market, while exports went up 5%.

“The initial target was 25% of the total. Buy-back schemes eventually accounted for 40%. We are now conducting other campaigns, which promote the energy class of the product,” Iavorschi said.

She added this campaign had a narrower reach because the energy efficiency class A home appliances (in case of refrigerators this means they can use up to 24% less power i.e.) accounted for about 200,000 units of the approximately 7.5 million refrigerators in Romania.

Arctic’s boss seems confident in the results of the next few months, but is reluctant to provide profitability figures, even though Arctic has been making profit since takeover by Arcelik and the average net income of the last six years exceeds 10 million euros.

“I believe we’re past the critical point,” Iavorschi says, mentioning the cost-cutting steps implemented by the factory, the 5 million-euro investments and the renegotiations with suppliers. Artic even afforded raises in 2009, with the lowest wages increased by as much as 15%.