Housewares manufacturers may be looking in vain for good news in 1996 following a dismal year for the plastics-intensive products. ``We continue to be nervous about the retail climate,'' said Tom Conley, president of the National Housewares Manufacturers Association in Rosemont, Ill. ``We hope sales will hold because  is a presidential election year, but we don't see much growth.''
Conley estimated housewares sales grew 2-3 percent in 1995 over the $54.4 billion recorded for 1994 in the United States. He confirmed that late-1995 sales were weak for an industry dependent on third- and fourth-quarter activity.
High resin prices hurt housewares producers' margins, and when passed on to consumers, discouraged purchases. Rubbermaid Inc.'s ``aggressive'' price increases, for example, scared retailers and consumers, said Eric Bosshard, research analyst with Roulston & Co. Inc. of Cleveland. Plastic storage containers made by Rubbermaid and others lost retail shelf space when consumers became uncomfortable with rising prices.
Bargain-hunting consumers are only part of the problem. Manufacturers also are worried by retailers' financial well-being. Discount giant Kmart Corp., for example, has been rumored for months to be close to bankruptcy. The Troy, Mich., merchandiser denies rumors it has been late paying its suppliers and insists it won't file for Chapter 11 bankruptcy.
Analysts and creditors have been nervous since last year's bankruptcies of discount retailers Caldor Corp., Bradlees Inc. and Jamesway Corp. Conley said bankruptcies are a problem for housewares firms already operating on ``razor-thin'' margins.
New products are key to growth in housewares sales, he said.
``Manufacturers who have grown this year have done it at the expense of other manufacturers. Retailers, who say they've not seen much new recently, are looking for a lot more newness from manufacturers because they believe innovation drives this category,'' Conley said.
New Tucker Housewares products illustrate the kind of innovation firms may need to stimulate sales. At the 1996 International Housewares Show in Chicago this month, it will introduce Cedar Tops, plastic clothing storage containers with cedar blocks built into the lid to deter moths and moisture. The Leominster, Mass., division of Mobil Chemical Co. also will introduce FreshGuard, an indoor wastebasket with a charcoal filter to fight kitchen odors.
Conley said retailers want new products but when they pressure manufacturers for lower costs, they can inhibit research and development expenditures needed for product development.
Bosshard predicts falling resin prices will encourage housewares firms to compete aggressively on product prices. ``New products don't solve everything. Price is still important,'' he said.
Rubbermaid is one major cutting its internal costs to meet price challenges from competitors. The Wooster, Ohio, firm last month announced plans to save $50 million annually by streamlining production and distribution.
Rubbermaid's challenges extend offshore, where it is investing to capitalize on markets that are growing faster than North America's.
``They are well-known in the United States but they are a new name overseas,'' said Bosshard. ``It's expensive to build brand equity and it's a battle to put in the [overseas] foundation.''
Rubbermaid also will face a new Tupperware company when Premark International Inc. spins off the housewares division by summer.