Measuring The Effects Of Circuit City's Demise

By TWICE Staff -- TWICE, 6/1/2009

TWICE: Can you measure the effect of Circuit City's demise? Are regional players and independents — not just national chains — getting a boost from Circuit's absence?

Stephen Bodnarchuk, M. Rothman & Company: It is difficult to measure the effect of a large national chain like Circuit City going out of business. Manufacturers are still learning what it means to lose a retailer of this size as well. Everything from forecasting, availability, product launch and advertising is being affected. Regional players and independents are seeing a short term increase in traffic and modest uptick in sales, but only time will tell if this is something that will be sustained.

Mark Gustavson, WYNIT: Theoretically, fewer national outlets should be a rising tide for regional and independent retailers. However, when demand is slow, surviving dealers must put a unique value-proposition — knowledge, service, tech expertise, support — directly in from of prospective buyers in order to capture sales that previously went to the big-box [stores].

Rob Eby, D&H Distributing: I think we're seeing this across the board in all consumer categories, and for different sized retailers. Certainly, Best Buy picked up a portion of this business, but at D&H, we're also seeing an increase in business with regional retailers, such as Fry's, Micro Center, CompUSA and BrandsMart.

Morey Gottesman, Cardinal Electronics: I think that the strong regional players are getting more traffic as a result of Circuit exiting the market. In the metro New York market, the regional players are very strong and are likely to pick up the lion's share of customers who were Circuit City customers. The smaller, independent retailers will do well in those areas where they can be competitive in pricing or offer unique value-added services.

David Kaplan, DDG: You can't release that much sales and market share without everyone enjoying a boost, but, frankly, it has had only a modest effect in the custom channel.

Warren Chaiken, Almo: Those dealers with a high level of visibility are seeing some additional foot traffic, but not a huge amount. Circuit City attracted consumers who are more price sensitive than a dealer-based customer who is more brand and service conscious. Since the demise of Circuit, most price-sensitive consumers are instinctively migrating toward other big-box retailers.

Jeff Kussard, Capitol Sales: It is too soon to tell if there is any real bump from Circuit's demise. It's a transitional time at retail. Not just for the CE business but in just about every major channel out there. But I don't know any retailers who were happy to see Circuit go. Competitor or not, a big-box retailer helps beat the drum for the channel at large.