Big weekend in appliances

With the state's second sales tax holiday on Energy Star appliances starting today, retailers are hoping for big sales, and shoppers are looking for big discounts.

But for appliance manufacturers, the holiday is a small highlight in what has otherwise been a dismal year.

Overall, shipments of household appliances within the United States are down 12 percent so far this year, according to the Association of Home Appliance Manufacturers. The last year of growth for industry was 2005.

The prolonged slump in sales has resulted in consolidation, cutbacks and layoffs.

So, anything to generate additional sales is a good thing.

"There are people sitting on the sidelines because they are worried about the economy and worried about money," said John Farley, spokesman for appliance maker Bosch, which has a plant in New Bern that employs about 1,000 people. "This gets the message out that there are rebates available, that there is money available."

Since it's the second year the state has had an Energy Star tax holiday, it's hard to gauge its impact.

Consumers who buy a qualifying product are exempt from paying the state and county sales tax, which is 7.75 percent in most counties, including the Triangle region.

The legislature estimates the state will forgo $1.4 million in tax revenue this weekend, and area retailers say they have high hopes based on how they did last year during tax holiday.

"It was our biggest weekend ever - in 40 years of business," said Andy Pittman, owner of Jeffreys Appliance Center in Raleigh. "We did a month's worth of business in three days."

Area stores are bulking up staff, launching marketing efforts and rolling out additional discounts to try to entice shoppers. Some manufacturers are also offering additional rebates to try to generate sales.

At Jeffreys, 90 percent of the store's inventory will be on sale on top of the tax break. And at Home Depot, appliances costing $399 or more will be 10 percent off, with an additional 10 percent discount for active duty or retired military members in honor of Veterans Day.

"It's usually you have your fall planting season and then there's a lull until Black Friday," said Clay Councill, manager of the Home Depot in Cary. "They've created incentives that would create one more foot-driver."

A statewide event like this tax-free weekend is valuable both for increased awareness of Energy Star appliances and sales, said Farley from Bosch.

"It's definitely going to generate energy," he said. "At least isolated within that state [North Carolina] we would see a 20 percent to 30 percent lift for that weekend."

But there's no guarantee that shoppers this year will flock to stores as they did last year, especially with the economy still slumping, state unemployment above 10 percent and holiday purchases looming.

Even if the weekend is again a success, creating increased sales for one weekend in one state will not be enough to turn around the downward trend for the household appliances industry, said David MacGregor, analyst for the Ohio firm Longbow Research.

"Tax incentives and stimulus programs provide temporary help but are not perceived by management teams or investors as a sustainable source of support," he said. "With this mindset, most corporate managers are going to be very cautious about coming out from under their desks."

The appliance industry may get a second North Carolina boost in the spring, when N.C. State Energy Office officials have proposed a four-day Energy Star discount program to distribute $8.5 million in federal stimulus funding for green appliances.

But retailers say they're not worried about the April event taking away sales from this weekend's tax-free holiday.

"That's six months out," said Pittman from Jeffreys Appliance Center. "If you're remodeling your kitchen now, you can't wait until April."