During a reception at the CEA CEO Summit in Dana Point, Calif., last month I joined a conversation between a major retailer and manufacturer.
After a couple of quick comments on the state of the industry, the conversation turned to the cost of doing business and the subject of health care reform came up. For a few minutes I listened, and these two execs began to compare notes about their respective company’s costs for employees, what features each company’s health care offerings have and the like.
I finally interrupted and said, “Guys, we’re at a reception for the CEA CEO Summit. Should we be talking about the industry?”
Sure, they should have, but in my experience during a recession, when retailers and manufacturers get together, they become economists, talking about interest rates, when housing starts will pick up, when oil prices will go down … and rising health care costs.
It reminded me of what an editor I worked for years ago said when someone did a story quoting industry types about the state of the economy: “Who the heck cares what they think about the economy? Ask them about something they know about - the industry.”
Well, fortunately, LG’s Michael Ahn, Panasonic’s Yoshi Yamada and Stan Glasgow of Sony know more than “something” about the industry and about the general economy. These three top execs volunteered their observations on both during a panel at the CEO Summit. Then CEA’s Gary Shapiro interviewed Gary Severson of Walmart, who provided a similar type of overview. (See stories on p. 1.)
The gist of what they said is what many of you know - they are several challenges ahead of us, many not of the industry’s making. Any return to mid-decade demand for CE will take time. While DTV sales in particular are doing well, margins are down and several other categories are hurting. And as for competition - at retail, distributor and supplier levels - all are at fever pitch.
Some retailers see clear opportunities, especially with the absence of Circuit City, which is still being felt. As you know, hhgregg is poised for major expansion, long-time metro New York retailer Sixth Avenue Electronics is moving into Delaware, and P.C. Richard & Son, celebrating its 100th anniversary this year, has some expansion plans of its own.
Most industry insiders we have talked to agreed that sales will improve in the second half and that there has been growth in the past month or so. But the growth in the second half will pale in comparison to what happened in second halves earlier in this decade.
The mood of the execs at the CEA CEO Summit seemed to me to be that they will have to slog forward in the next few months to achieve their goals. “Slog,” according to the Merriam Webster Online Dictionary, means, “to plod (one’s way) perseveringly especially against difficulty.”
For an industry that has known strong annual growth rates in the past decade and is known for rapid change, to slog forward may be uncharacteristic. It may be slow going compared with the flush times in the rest of this decade, but to slog forward has its virtues. To slog forward should mean there will be some success in the marketplace during the second half.