Distributors See Gradual Q2 Growth For CE Retailers

By TWICE Staff -- TWICE, 3/8/2010

TWICE: What is the current state of retail as we approach the second quarter? How are independents, regional retailers and custom installers doing?

Jeff Kussard, Capitol Sales: Our dealers seem to have returned from CES with a real sense of cautious optimism. They are signifi cantly more optimistic than they were following last year’s show. If you look at the product emphasis, there was no reason for any constituency — regional, big box or [custom] — to question that things are slowly looking up. I don’t think anybody expected there to be an immediate turnaround.

Our customers in the installation community are reporting a great deal of interest in new products geared toward retrofit installations that are quick and reliable.

Bill Stewart, Petra Industries: I think all three dealer types are beginning to stabilize their businesses as we approach Q2. The key areas for all these groups to remain successful this year is keeping their inventories in check, offering great deals to price conscious consumers and giving those consumers exceptional service.

Stephen Bodnarchuk, M. Rothman and Co.: Retail remains challenging still. We see channels such as dotcom, off-price retailers and discount department stores reporting flat to modest sales increases. Regional retailers are still repositioning as more and more companies continue to exit the CE category or close completely. Custom-install business remains slightly down and we see this trend continuing for the near term. On the bright side the retailers that have adapted and repositioned accordingly are forecasting increases for the back half. Competition for customers remains fierce.

Fred Towns, New Age Electronics: The current state of retail as we approach second quarter is very steady. However, regional retailers and custom installers are against some tough competition with the big-box retailers. In order to differentiate themselves retailers are looking for more value opportunities such as bundling. Consumers are more deal-centric than ever and it’s critical that regional retailers remain creative in there offerings.

Doretta Raffio, ADI: The first quarter for the custominstallation market has had a bit of a slow start. Seasonality and coming off the holidays had an impact, consumer confi dence was not as strong as it could be, and consumers seemed to be holding onto their dollars. We are cautiously optimistic for the second quarter as there may not be tremendous growth, but we are confi dent that there will be more opportunity in the custom market.

Mark A. Gustavson, WYNIT: While inventory levels in the channel are by no means as overstocked as they were at this time last year, sell through is a bit soft, affecting stock purchases for Q2. Independents and regional retailers continue to seek ways to differentiate themselves from big box by offering SKUs not available from the large national retailers and e-tailers. There has also been a visible advertising trend by independents positioning their salespeople as knowledgable resources for consumers as opposed to just “kids in blue shirts.”

Warren Chaiken, Almo: Our customers continue to be cautious but optimistic. They are watching the bottom line while looking for solid growth opportunities. At the same time, they are confi dent that business will increase throughout the year as the economy cycles up.

Benjy Goldstein, Fesco Distributors: Retailers are regaining ground from past losses. Newer technological advancements are paving the way for increased sales. Product convergence is king! The more things work together, the easier it is to sell a complete solution.

Jeff Davis, D&H Distributing: We continue to see strong sales activity across a number of the large-format retail chains. In addition, independent retailers are actually showing better growth than retail market conditions. Smaller entities can be resilient and quick to react to their local conditions. The custom-installer market continues to hang on … [and] some are finding ways to diversify.