Retailer Comments

Question: Do you consider the margin you make on your barbecue products to be too low?
Are more of your customers creating Outdoor Rooms?
What could barbecue manufacturers do to help you sell more of their products?

Sales of barbecue grills were down each year from 2000 to 2010; sales were marginally positive for the next three years, then leaped up to a 13 percent increase in 2014.

Northeast

Maryland: “Margins are fine. Outdoor Rooms are not big in our area. Manufacturers should get out of the Box stores.”

Massachusetts: “Most of the margins are low. Outdoor Rooms have been taking off on Cape Cod for a while. I feel it’s mostly due to a higher median income here; with a lot of seasonal homes, customers want to entertain at home while they’re here. Manufacturers need to do two things. 1. Increase profit margins. 2. Offer experienced sales reps or other representatives to assist in outdoor promotions and educate dealers on product.”
New York: “Margins are too low. More commercial advertising would be great!”

New York: “No, I don’t consider the margin too low considering the demographics of our region. I don’t hear about customers creating Outdoor Rooms very much; I believe it’s because of our climate. It’s too cold most of the year. Our warm season runs mid-May to mid-September.”

Pennsylvania: “The margin we make on our gills is based upon our competition. That’s the reason why we don’t sell cart grills anymore. Let the Big Box stores have them. We will stick with the drop-ins, pre-fab-grill islands and outdoor kitchens. We are designing more, geared toward the Outdoor Room, but in a step-by-step approach allowing our customers to spread out the cost.
“Now, as far as how a barbecue manufacturer can help – the good ones you don’t have to ask because they have already asked us and are helping. Now, the others should stop being so damn greedy and (selling) out to anybody and everybody, including the Internet, and take a damn hard look at their core values.”

Barbecue sales were up 13 percent in the U.S. last year, thanks to large increases in the South (17%) and West (20%).

Only in the Northeast and Midwest were the percent of retailers showing a plus year below the 50 percent mark.

South

Florida: “Increase MAP without increasing cost.”

Georgia: “Margins are too low. Customers are definitely creating Outdoor Rooms. Raise MAP pricing to 35-to-40 percent margin and police the Internet.”

Louisiana: “Yes, margins on barbecue products are always too low. Yes, more customers are creating Outdoor Rooms. Barbecue manufacturers could help sell more of their products by having adequate stock, accurate information and better support/service options from the factory.”

Louisiana: “Margins are somewhat too low. Customers work mostly with contractors. Patrol Internet sales! Quit selling to both mass merchants and specialty dealers or give specialty dealers better discounts in order to compete.”
Tennessee: “The margins on the lower-end Weber grills are too low, but when getting into their more expensive grills, the margins are better. Need more advertising.”

Texas: “We are seeing a steady increase in customers building outdoor living areas.”

Texas: “Depends on retail price. We mark up Keystone except for items over $200 which aren’t marked up as much.”

Texas: “Manufacturers make cookie cutter products, sell them to everyone, and even sell them themselves. Margins have been cut thanks to grill manufacturers by over 20 percent in a 10-year time span. (I used to make over 50 percent gross profit margin, now I struggle to stay over 30 percent).
“There is no integrity with any manufacturer in this race to the bottom of commoditization. I state this with 23-plus years industry experience. Through my wife’s and my sheer determination, we have managed to increase cash flow and profit dollars, but we are tired of the manufacturers.”

Virginia: “No, margins are OK. Just a few Outdoor Rooms (are being built). Manufacturers can keep us stocked with literature and faster ship dates.”

Number of Brands Sold 2014
Fifty-seven percent of specialty barbecue retailers carry more than four brands of grills.

Began Carrying Barbecues – 2014
Thirty-nine percent of respondents have been carrying barbecues for 20 years or more.

Midwest

Illinois: “Not sell them in Big Box stores.”

Illinois: “Advertise.”

Iowa: “Need 35-plus margin. Outdoor Rooms are very small and usually done by landscapers; they buy on the Internet for price. We need to develop a relationship with them, but price always wins. Internet sales are always hard to compete with. Manufacturers need to set a minimum price and stick to it.”

Kansas: “Yes, we have seen our margins drop for several years. There is nothing they can do for us. They have spread the sale too thin by selling to too many dealers, online stores and mass merchants. We have seen the peak. Now it’s all about the fall-out. Only the strong will survive. Note: When online looking for a Traeger grill you can find 30 dealers in a 50 mile radius, and they are not the only one; every manufacturer is doing the same thing.”

Michigan: “Yes, we have low margins since mass retailers can sell low-grade Chinese stainless steel that looks good but is so light gauge! Stainless rusts, dents easily, no repair parts usually available and they dump products to customers that love cheap products. They have ruined the grill margins.”

Minnesota: “Yes, margins on barbecue products are too low. Customers are doing more outdoor living designs.”

Missouri: “We consider barbecue a necessary category but not one that is focused on profit. We depend on our grill area to bring in repeat customers. By the time we have low margins and freight it’s almost pointless. It’s our lowest margin department.
“We do focus on the Outdoor Room. Doing five decks on a house is normal for us. Barbecue manufacturers need to realize their margins are not realistic for brick-and-mortar stores. We will sell other products that have better margins.”

Ohio: “Grill margins are lower than we would like. Internet sales make it difficult to carry the brands that have margins that don’t justify the space they require to stock. In Northeast Ohio, the Outdoor Room is much more toned down than in warmer areas of the country. Tough to justify spending $50k on a room that will only be used three to four months out of the year.”

Wisconsin: “Too many retailers carrying the same product which leads to ‘panic selling.’ Supplier should recognize one to two progressive retailers allows all to make better margins.”

Wisconsin: “More people are creating outdoor fire pit and grill areas. Mosquitos are a challenge in this area.”

Smokers and kamados continue with steady annual growth. Infrared grills grew a whopping 18 percent, which is either a reflection of its being a small category, or of respondents including grills with only partial infrared capability under that category.

Fifty-two percent of grills sold by specialty barbecue retailers fall between the $800 and $1,999 price range.

West

California: “Devote interest to small dealers. Give the same incentives as Big Box stores (Ace, Costco, etc.).”

California: “Police online prices and sales. All manufacturers give MAP pricing but no one uses it or sells at it. We match online prices.”

California: “Average margin. Yes, outdoor living/entertaining is popular. American made sells best!”

Colorado: “Big Green Egg is superb with pricing and margins. Traeger has taken a 180 and is becoming livable again. I would like to see Internet marketing and promotions designed to drive business to their dealers.”

Oregon: “Yes, margin too low. No, not creating Outdoor Rooms. Better point of purchase and onsite training demos.”

Washington: “2014 was a good year; every part of the business was up – hearth, spas and pellet barbecue grills. Looking forward to increasing in 2015.”

Washington: “Stop opening up lumber yards to our product.”

Washington: “Yes, our barbecue margin is cut down by online retailers with little to no overhead. Yes, we create Outdoor Rooms most of the year. Better marketing support and controlling brand image ‘price.’”

Canada

Alberta: “Our product margins are OK since it is not sold in Box stores. The manufacturers should not sell their products to Box stores.”

British Columbia: “Yes, the margins are too low and there are too many retailers in this industry and too many Big Box stores. Manufacturers do not set up respected territories.”

New Brunswick: “Would like to make better margins to cover service calls and assembly of all barbecues.”

Ontario: “Margins should be 35 percent minimum. It’s a tough game out there, survival of the fittest! We are going to get into more of the built-in market this year.”

Ontario: “Margin increase to retailers. More early advertising.”

Ontario: “I would like to see a 35 percent margin. We have done that in the past. We are currently at 30 percent (too low). The Outdoor Room has not become a big thing – yet.
“Manufacturers need to provide better (faster) delivery on product and parts. Provide dealers with better compensation for warranty repairs and stop expecting dealers to provide tech support for products sold in Big Box stores.”

Ontario: “We need quality barbecues to compete with the Box stores. It is easy to separate ourselves from them if we have better quality, regardless of price. The race to the bottom should turn around.”

2015 Sales Expectations
Sixty-one percent of responding retailers believe 2015 sales will be above those of 2014.

Derivation of Gross Revenues Barbecue Retailers
Specialty retailers of barbecues derive only 25 percent of their total revenues from that category; their main product category is hearth products, by far.

Main Factor For A Down Sales Year in 2014
Retailers who posted a down year attribute that fact mainly to competition from mass merchants.

Number of Gas Grills Sold – 2014
Only 24 percent of specialty barbecue retailers sell more than 100 units each year.