Do Reporters Even Look At Their Own Charts?

A Wall Street Journal article today looks at problems at Sears in their critical appliance business.  I have no problem believing that Sears is in trouble, and at various times over the past decade (full disclosure here) have held small short positions in Sears.  The author argues that the Sears appliance business has had a number of missteps, and is contributing to Sears growing losses, propositions with which I cannot argue, in part because there is no data provided to confirm or deny the connection between problems in the appliance business and Sears' profitability woes.

The other theme of the article is that recent missteps in the appliance business, particularly the 2009 switch from Whirlpool to Samsung and LG to manufacture its in-house Kenmore brand, is hurting its market share in the retail appliance business, and leading the the growth in market share at Home Depot and Loews.   But the author's own data belie this conclusion.  Here is the market share chart she includes:



While Sears may have lost a couple of points of market share since 2008, and 2013 does not look like a particularly good year so far, the vast majority of its market share loss occurred from 2002-2008, long before most of the recent problems profiled in the article.  In fact, its more likely that the loss coincided with Sears reorganization with Kmart a decade ago, events referred to only briefly in the article.

Look, I have no insider knowledge here, just a pet peeve that trends referenced in an article should match trends in the data.  But Sears is a tired old retailer.  Many of its peers from the same era are dying or dead.  People are shifting their shopping away from the malls where Sears is located.  Lowes and Home Depot were both juggernauts during this period.  I would have said that a story could equally well have been written that despite all the confusion in their business, they have done a pretty descent job arresting the decline in their market share over the last five years.  Of course they are likely dead in the long run.

Postscript:  Oddly, I witnessed a similar Sears private label fracas when I worked for Emerson Electric over a decade ago.  For years and years, Emerson (not the folks who make the cheap radios and TVs) manufactured many of the Sears Craftsman hand tools and power tools.  Sears got tough one year, and negotiated a better deal of some sort with someone else, and an entire division of Emerson saw its sales basically going to zero.  So Emerson bought a bunch of orange paint and plastic, went to Home Depot, and cut a deal for a private label tool line at Home Depot (Emerson separately owns the Rigid tool company, so a lot of the items were branded Rigid).  Emerson ended up in potentially better shape (I did not stay long enough to see how it turned out), partnered with a growing rather than a declining franchise.


  1. Russ R.:

    Thanks Warren,

    I had no idea that Sears' most valuable brands (Kenmore and Craftsman) were nothing more than private labels on other manufacturers' goods.

    Has this always been the case, or did they start out as in-house products that were ultimately outsourced?

  2. mesaeconoguy:

    Howard Davidowitz (retail expert) on Sears and likelihood of either bankruptcy or liquidation of businesses -

    Check out his bonus comments on the shitty economy (second half of interview)

  3. Brad Warbiany:

    I think it's also interesting to note that Sears' biggest declines were right in the middle of the housing boom, and market share stabilized when the real estate crash happened.

    I'm not entirely sure what to make of it, of course. But with as much flipping and other RE activity was going on, I wonder if Home Depot and Lowes benefited in their appliance sales from a big up-tick in the rest of their business.

    What would be really interesting is to overlay unit sales trends onto that graph to see if 2002-2008 were a large rise in unit sales, with a noticeable change in slope from 2008-current.

  4. obloodyhell:

    }}} Do Reporters Even Look At Their Own Charts?

    Do reporters understand jack or his smelly companion?

    THIS is the actual applicable question.

  5. marque2:

    Jack is now Jacqueline.

  6. marque2:

    Yes. Sometimes you can look online and figure out who manufactured the device. Sometimes Consumer reports will tell the manufacturer as well.

  7. T:

    As per internet rule #5,629,321.6, the correct answer to any headline which is in the form of a yes/no question is "No".

  8. ErikTheRed:

    If anything, moving to Samsung and LG was a brilliant move - those two brands generally top Consumer Reports' reliability rankings.

    That being said, I've bought my last three major appliances over the Internet... and I'm wondering why on earth anybody would buy them in a store anymore, unless they're willing to pay a ~ 20-30% premium to get them immediately.

  9. andarm16:

    I love how the reporter tries to distract him, and prevent him from telling the truth. That video is classic.

  10. marque2:

    I bought my GE clothes washer at Sears for $350 a year ago, when it was selling everywhere but everywhere, including the Internet for $650. It an HE top loader.

    If you wait for the specials you can get better deals at Sears. Plus the nice thing is you get to check out the item first.

  11. marque2:

    Note about Consumer reports. They are a left wing nut organization, they used money collected from Consumer reports and donations to lobby for progressive causes. They even report this in the magazine. They are proud to have helped get Obamacare passed, they are proud of the water restrictions on washing machines that they helped to enforce (20 years ago, Consumer Reports rated almost all clothes washers excellent, since the change, most are mediocre at best)

    Also I have to wonder any more if they have the readers best interest in mind. For instance they always recommend HE washers. You don't see them test ordinary washers any more. But is paying $750 for a new HE washer really better for the consumer than buying a $350 standard washer. My I figure the energy and water savings do not come close in 10 years of useful life to making up for the extra cost.

    So note, CS is a good place to look but beware, and be warned that if you buy the magazine you are supporting leftist causes which the trump on the first page.

  12. skhpcola:

    Sears--at least in the modern era--has never been a manufacturing concern. The major appliances used to be primarily Whirlpool and Maytag (which are now the same company) and probably still are. Search for parts for a Sears-branded appliance and, as marque2 says, you will discover who built the item.

    I have a small, dorm-size Sears, Roebuck & Co. refrigerator from the '60s. This sumbitch weighs about 200 pounds and is built like a tank. It's been passed down to me from my father, who bought it in 1967 or so. It's never needed to be recharged, although it might now, because I've had it unplugged for 3-4 years. The thing was made in of "Holy shit, I didn't know that they actually produced durable goods."

    Sears is in decline not because their stores are primarily located in malls. They're going tits up because it's a old(er)-person store. My parents, aunts, and uncles always bought their appliances and tools from there. They bought linens and towels from JCPenney. Don't ask me why, that's just what they did. Younger generations have more options, backed up with comparable guarantees. There was a time when having Sears warranty the performance of your refrigerator meant a lot. These days, not so much.

  13. skhpcola:

    My dad was a CR subscriber. He'd call them up, cuss them out, and cancel the magazine, if he was still alive. Why they feel that political advocacy is in their best interest is puzzling. Their research is very valuable, but seeing them tool around for populist progtard causes is a risky tactic. Pissing off 50% of your potential customer base isn't so smart.

  14. MNHawk:

    I do the online access thing for something like $12. That way I get the product reviews without all the added leftist crap of the magazine. Which gets to the point of Whirlpool stuff being rated fairly consistently high. Korean brands, now hit and miss, up from absolute bottom 10 years ago or so.

    That would explain Kenmore going down the tubes