All Not Rosy For Top 100

With all the concerns about the national economy, fears of terrorism at home and abroad, and a possible war in Iraq, consumer electronics retail sales should have suffered during 2002. If you take a look at this year's TWICE Top 100 CE Retailers report, you'd find that the opposite is the case.

But if you look at the individual numbers closely, especially the performances of those in the top 10, the performances were not uniformly good.

Still, as an overall report, this year's edition on calendar year 2002 sales of consumer electronics in the U.S. is significant, if not historic. For the first time, the TWICE Top 100 CE Retailers list crossed the $100 billion level, to $101.5 billion, a 6.1 percent increase. In any year that would be great news, but in an uncertain year like the one just past, it is a major accomplishment.

In compiling the Top 100 for 2002, and reviewing the prior year's numbers as we always do, we found some significant changes at the top.

Best Buy's branded stores, not including Magnolia Hi-Fi and Musicland which are listed separately, is still No. 1 with over $14 billion in sales, an increase of 14.4 percent.

However our numbers for Wal-Mart changed significantly when we reviewed 2001 and 2002 performances in consumer electronics. Wal-Mart replaced Circuit City as the second largest CE retailer in the country with over $14 billion in sales, a 12.9 percent gain. Circuit City, which is still changing its merchandising mix and strategy, posted a 4.6 percent gain in CE sales to almost $10 billion, but it wasn't enough to get the No. 2 ranking.

There were other surprises in the Top 10. Dell Computer, which was never included in our Top 100 in the past because it used to only sell its own brand, branched out into CE, selling other brands. The Top 100 "rookie" slid into fourth place with $5.3 billion in sales, an increase of 18.2 percent.

Two stalwarts of the TWICE Top 100 for years, RadioShack and Sears, scraped along with sub-par performances during 2002. RadioShack, with its 7,146 stores nationwide (100 less than 2001), posted sales of $4.5 billion, slipping two spots to a No. 6 ranking. Sales were down 4.1 percent. Sears' CE sales dropped 15.4 percent in 2002 to $2.75 billion, giving it a No. 9 ranking.

One would make the logical assumption that if the Top 100's sales have surpassed the $100 billion level, with even a couple of the Top 10 retailers having lost sales, then the independents that didn't make the list must have taken a hit.

Well if you have been reading TWICE over the past two or three years it has been well-documented that privately-held independent retailers have done as well, or better than, major national and regional chains. Many of those independents, while too small to make the Top 100, benefit from being members of the industry's major buying groups. And those smaller retailers and their buying groups continue to be prized among broad-line CE suppliers for the ability to explain, service and sell many of the new and emerging digital products that are being offered by the industry today.

So while the small guys still have to be concerned about the giants and the major regional players they compete against, it is the national chains that seem to have the most to lose. Those national chains at the top have to look over their shoulders to make sure that a fellow giant won't knock them off. With the economy still wobbly, and Wall Street watching their every move, that looks like the biggest worry of the biggest chains during the balance of 2003.