Large home appliances in Ukraine may become more expensive: retailer explains the reason

Purchase prices for large home appliances in Ukraine may rise by about 7-11% due to a significant increase in logistics costs and war risks. Market participants' logistics expenses have already become roughly 1.5-2 times higher than before.

This assessment was provided by Yuriy Polishchuk, CEO of "Foxtrot", in a commentary to the Association of Retailers of Ukraine.

According to him, large home appliances are the most sensitive to the rise in logistics costs. This includes, in particular, refrigerators, washing machines, and televisions. Such goods take up significant warehouse space, require more complex transportation, and large batches of direct imports are harder to quickly replace in case of supply disruptions.

According to the company's current estimates, purchase prices in this category may increase by approximately 7-11%.

For medium-sized appliances, the impact may be somewhat lesser. Multi-cookers, vacuum cleaners, grills, and other kitchen appliances may rise by 4-7% due to military and logistics risks.

The least impact is expected on small home appliances and electronics. They are less dependent on complex logistics, so potential price growth is estimated at about 2-3%. At the same time, the final cost of such goods may be additionally affected by currency exchange rates and rising prices of electronic components.

Logistics costs increased up to two times

"Foxtrot" notes that practically all market participants are currently working with significantly higher delivery costs. Compared to the previous period, they have risen by approximately 1.5-2 times.

This is simultaneously influenced by complications in logistics routes, more expensive international transportation and insurance, additional security requirements, and a general increase in operational costs.

In addition, international suppliers may include a risk premium for working with the Ukrainian market in the product price.

The problem is aggravated by Russian attacks on warehouse and logistics infrastructure. After damage to large facilities, companies must redistribute stocks among other warehouses, change delivery routes, and search for additional space. This increases business costs for storage and transportation of goods.

No appliance shortage forecasted yet

Despite logistics problems, no systemic shortage of home appliances is currently expected in the Ukrainian market. However, temporary unavailability of certain models is possible.

The most vulnerable items are those imported in large batches and requiring significant warehouse space. If supplies of such products are disrupted, it is more difficult to quickly replace them with other models or a new batch.

At the same time, the projected 7-11% increase refers specifically to purchase prices for large appliances. The extent to which these additional costs will ultimately be passed on to retail prices for consumers will depend on competition between chains, stocks of specific products, currency exchange rates, and suppliers' pricing policies.

Based on materials from: Association of Retailers of Ukraine