The pandemic boom in grill sales is flaming out, roiling major manufacturers.
What’s happening: Weber on Monday announced the abrupt departure of its CEO amid plunging sales, while Traeger last week announced a round of job cuts.
• Weber said it’s also considering layoffs. Its stock fell 12.7% Monday.
Why it matters: The reversal in fortunes for an industry that soared in the early days of the pandemic is another example of how Americans are shifting their spending.
• “The problem is that grill companies got used to the hyper expansion driven by the pandemic,” CookOut News CEO Wes Wright tells Axios in an email. “They believed the pandemic levels of demand would remain, and we’re seeing a shift back to normal from consumers.”
By the numbers: Weber on Monday estimated that its sales in the quarter ended June 30 would total $525 million to $530 million, down from $669 million a year earlier.
• The company blamed the drop on “slower retail traffic, both in-store and online, in all key markets,” currency issues, inflation, “supply chain constraints, fuel prices and geopolitical uncertainty.”
• CEO Chris Scherzinger is out, and CTO Alan Matula will serve as interim CEO.
The big picture: A sales fallback was probably inevitable for grill makers that benefited from what CFRA Research analyst Arun Sundaram recently told Axios was “pulled forward” demand, in part fueled by stimulus checks.
• “You can even go back to our website data, and there’s direct correlation with the weeks that those checks hit, and the spike in traffic and the spike in spend that happen when those checks (hit) people’s accounts,” John Merris, CEO of Solo Stove maker Solo Brands, said at a recent conference.
💭 Our thought bubble: The fact that spending on restaurants and travel is soaring tells you why grill sales are plummeting. People want someone else to cook for them for once.
The bottom line: Grill sales are getting back to typical levels.
• “I did an analysis of Google trends for May that show that we’re at the 2019 levels for consumer searches,” Wright says. “That’s what’s normal, not the crazy spikes you see in 2020 and 2021.”