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2009: The Big Got Smaller

6/21/2010 11:24:00 AM

At TWICE, the end of first half coincides with us presenting reports that track the industry top retail performances in the prior calendar year, and 2010 is not an exception: TWICE’s Top 100 CE Retailers (May 17), Top 25 PC Retailers (June 7), Top 100 Major Appliance Retailers and Top 25 Car Electronics Retailers.

Usually with these types of reports one says, “The big get bigger.” Looking at these four reports as a group, you could say for 2009, “The big got smaller.” Not that it benefitted smaller retailers because the recession hit everyone.

According to our estimates for calendar year 2009, the TWICE Top 100 CE Retailers’ volume was up but 2 percent; Top 25 PC Retailers had 3.8 percent sales growth; Top 100 Major Appliance Retailers’ sales were down 3.7 percent; and the Top 25 Car Electronics Retailers’ revenues were down 10.8 percent.

That’s why when TWICE spoke to retailers and manufacturers at just about any time during the torturous 2009, many said, “Flat is the new growth curve,” or words to that effect.

The Top 25 Car Electronics sales drop wasn’t just about the economy. That compounded the problems the category has had over the past few years in inspiring with new technology its traditional demographic - young men older than 18 - to upgrade the entertainment experience in their vehicles. There seems to be some progress on that front as the economy ever-so-slowly revives, but more has to be done to get it back into a true growth mode.

The Top 100 Major Appliance Retailers’ sales decrease during 2009 was moderate given the implosion of the housing market in the U.S., an industry it lived on for years.

To give you an idea of what it was like in white goods last year, only Lowe’s (No 2 on the list), Best Buy (4), and hhgregg (6) showed growth.

As one retailer told us last year, “The industry has gone back to a replacement buy, rather than an aspiration business.” That may remain true in 2010 but with continued upgrades in technology and a slight improvement in the housing business, sales should improve this year.

In the Top 25 PC Retailers’ list, sales got a boost from Windows 7, netbooks, e-readers and a wide variety of accessories. For instance, No.1 on the list, Best Buy, grew in PCs by 16.1 percent last year, with eight of the top 10 retailers showing growth. With iPad and tablet devices in this year’s mix, further growth this year should be expected.

And, of course, the Top 100 CE Retailers had 2 percent growth, and if you use the line from political polling - “that is accurate by + or - 2 percent” - we are talking about a flat year for the biggest chains in the business. But as we have reported in recent weeks, CE retailers are optimistic at midyear, with growth in several categories and relatively stable pricing.

While it won’t be a boom year in the categories tracked in TWICE top retailer reports, this year looks like one of gradual improvement. And that’s a heck of a lot better than 2009.

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