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MARTA's Sales Are Up, Despite Some Shortages

SCOTTSDALE, Ariz. -- In one of their biggest shows ever, MARTA Cooperative of America members reported majap and consumer electronics sales were up for the first half of 2000 and expected continued rises in the second half.

MARTA's executive director Warren Mann said the group's members were experiencing increased sales across the board through May, with appliances estimated to be up 5 percent and consumer electronics "flattish to strongly up."

Attendees to the show, which was held at the Fairmont Scottsdale Princess resort here on June 15-17, touted built-in kitchen appliances as the best-selling majaps, while glass analog and projection TVs were the top-selling CE products.

Headquartered in Phoenix, MARTA is a 120-member buying group with approximately $2 billion per year in combined annual sales - split roughly at 50 percent appliances, 30 percent consumer electronics and 20 percent furniture, according to Mann.

Many of the approximately 100 present members expressed concerns that they could not fulfill their customers' demands in some of these areas, especially projection TVs, HDTV and HD-ready sets.

"I have no idea where we would be if we could get all the products," Mann said, referring to supply shortages in HDTV and HD-ready sets. In addition to those missed sales, he said there are other products, such as speakers, which retailers could be selling as accompaniments to the high-definition TVs. "It's frustrating," he added.

"With the prices coming down, the demand [for HDTV] is higher than they thought. They just didn't forecast enough," said Tom O'Shaughnessy, a district sales manager for Zenith who was at the show. "The bottom line is everyone will have high-definition televisions, we're just starting out."

Trevor Anonsen, video buyer of National Camera Exchange in Golden Valley, Minn., said digital cameras and camcorders were also in short supply due to chip shortages.

"We're exceeding our expectations in some areas [digital and camcorders]," Anonsen said. "It seems to be across the board, and that may have hurt sales early in the year."

There was also speculation that air conditioners would be a high-demand, low-supply category this summer.

"A lot of retailers ordered air conditioners late this year," which is leading to a shortage now that the hot weather is setting in, said Bernie Tymkiw, senior VP of sales/marketing at Haier. He said many retailers had doubted AC would be in demand this year, after three strong years of sales in the category, but were now being pleasantly surprised.

Among the best-selling appliances mentioned at the show were built-in cooktops and front-loading, energy-efficient laundry machines, which some retailers and manufacturers said would only increase as the government starts pushing energy efficiency.

"We're seeing nice increases in middle- to high-end products," said Don Murrel, VP of Home Appliance Mart in Ann Arbor, Mich. "Stainless steel and bisque-colored products are selling well."

A handful of retailers said this show was one of the best in terms of the quantity and quality of what the manufacturers were offering. The show displayed brown and white goods, as well as furniture, from 75 vendors, compared to 53 last year.

Dave Dion of ABC Warehouse Utica in Utica, Mich., said he thought the show was an improvement over past ones because manufacturers were offering a wider selection and more complete product lines to the mom-and-pop retailers.

"The appliance companies have become more aggressive," he said.

Although the group's outlook for the rest of the year was positive, Mann stressed the importance of combating competition in the form of emerging national retail chains such as Lowe's. "We've seen precipitous price erosion since Lowe's has been in business," he said, while suggesting three ways MARTA members can stay ahead in their markets:

  • · "Don't share the SKUs."

  • · "Train salespeople to enhance the value by pointing out the differences [in the products]."

  • · And "sub-brand," or carry brands that national stores don't. This often means higher-quality goods.

Mann is optimistic that MARTA can overcome the challenges posed by nationwide chains, and said, "I don't envision that that which has kind of blindsided us is sustainable."