By Lisa Johnston
New products on display at the American International Toy Fair, held in N
Sales in car audio this summer range from flat to 20 percent ahead of last summer, according to a TWICE poll of independent retailers.
Approximately two-thirds of the retailers polled by TWICE said sales were flat while the others said sales were up by as much as 20 percent. However, many of the smaller independent retailers are concerned that ongoing product shortages, the most severe in years, are beginning to cut into sales. (See TWICE, May 27, 2002, p. 3).
Many retailers said that basic autosound sales remained flat but that growth in mobile video or other categories accounted for gains this year. Store traffic and consumer confidence is still very difficult to gauge, they said.
"It has really been a roller coaster. Traffic is very sporadic. We'll have some exceptionally good weeks followed by depressing weeks," said Joe Cavanaugh, owner of Stereo West, Omaha, Neb. "It's difficult to establish a pattern. We don't know why, truthfully. In car audio we're flat, all the growth is out of performance accessories, which is up well over 50 percent."
Sales at CarToys, Seattle, are up slightly per store. Innovative Audio, Belleview, Wash., and Cartunes, Stillwater, Okla., report sales up 20 percent in autosound. Meanwhile, reported sales were flat at Brands Mart, Kansas City, Mo.; Hi Fi Fo Fum, St. Louis; Action Electronics, Newington, Conn.; and Pirate Radio, Manchester, Conn.
Rick Mathies, executive director of Mobile Electronics Retailers Assn., said for the most part members are reporting flat sales in traditional 12-volt product. "It looks like those folks who are really making an effort in mobile video are doing well there and those companies who have taken on automotive performance accessories are doing quite well with it. But everyone I've talked to says autosound is pretty flat," he said of MERA's current 500 retail members.
The mixed results this summer follow reports of a very strong April, according to the Consumer Electronics Association, which recently released figures stating that car audio sales gained 21.5 percent in April, to $201 million, a record for the month. Sales were up 8.8 percent for the period January through April.
Moving forward for the year, of particular concern to many smaller retail chains and independents are current product shortages. "The shortages are impacting sales somewhat. I've heard a lot of complaints," Mathies said.
"For most dealers, this is the worst year we've ever experienced in product shortages and it's affecting business because we're not getting supplies of key models," Stereo West's Cavanaugh said. "A lot of product rolled out late, and when it finally came in, we sold out and were out of stock and that makes it difficult to build momentum. The shortages are still going on. With XM radio, our primary tuner is Alpine and we have none — not a single piece to sell in the company. So that's frustrating. And we can't tell our customers when it will be in."
Tom Olla, buyer for The Specialists, Tucson, Ariz., said shortages are impacting sales overall as well as XM sales, specifically. "It's still a problem. We'd do really well with XM, but we just don't have the hardware," he said.
Similarly, BrandsMart U.S.A. buyer John Brumbaugh said, "Shortages are cutting into sales. I'm not going to put a number on it, but I'm losing a prospective amount of growth. We have several units in backorder, in head units across the board. It's sporadic — you get a big shipment and then nothing. It's been a real struggle. Every brand is short of product in head units and I'm beginning to see a bit of trouble in amps and speakers."
Larger retailers, such as Car Toys, said they were experiencing fewer problems. But even Best Buy admitted to spot shortages.
A spokesman for Best Buy said, "Generally we should be in stock with most of our car audio product for most of the summer. However, due to consumer demand and product shortages, we may have trouble keeping a few of our hottest selling SKUs in stock until the end of August. After that, we should be fine."
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.