Petra’s Stewart Weighs In On Key Industry Issues
By Steve Smith On Jun 22 2010 - 2:16pm
NEW YORK — As part of the
TWICE Distributor Report in our last
issue (see TWICE, June 7, p. 30) Petra
Industries’ president/CEO Bill Stewart
was also questioned about some key
Unfortunately, his responses arrived
right after our deadline. Here are Stewart’s
views on four industry issues, including
his opinion on Walmart’s new strategy
for CE (see TWICE, June 7, p. 1).TWICE: Pricing reportedly has stabilized
in several categories. Why?
I think retailers are realizing
that consumers are feeling more confi dent
in the state of the economy and are opening
up their wallets again. Getting the
lowest of the low prices isn’t the number
one priority, which means that retailers
can make better margins on their lineup.
However, retailers need to make
price adjustments gradually and continue
focusing on good marketing and
great service to keep their customers
coming back. I think there is
still some volatility in the rawmaterial
costs for manufacturers,
so we could still see some
pricing spikes, but overall I
think prices will remain pretty
stable through the second half
of the year.
TWICE: Retailers have been
complaining about spot shortages
in HDTV and other categories.
Panel and spot shortages
have been pretty common the last few
years. Manufacturers have reduced their
inventory levels in some areas, but we
remain hopeful that they will ramp up
production as the fourth quarter draws
near. To help with these problems, we
work closely with our customers and
our manufacturers to provide accurate
forecasting that allow us to keep the
right products on hand so retailers can
count on us for just-in-time inventory
and we can maintain our 99.8 percent
fill rate as we approach peak season.
TWICE: Home audio has quietly
been making a comeback, and
consumers are increasingly using
accessories to upgrade their hardware.
How are those two categories
performing for you?
Accessories are the
real backbone of our product
mix, and we have seen an increase
in our accessory business across
the board, home theater included.
An upgrade in existing hardware
for the consumer means high-margin
add-on opportunities for the dealer,
so we continue to stress to our dealers
the importance of educating consumers
on how easy it is to extend the value
of their investment by simple things
like the right cables, power protection,
mounting solutions and so forth.
Our sales are up for the year across the
board — specific product groups that
are doing really well are A/V mounts,
iPod/iPhone/iPad accessories, netbook
and laptop accessories, portable audio
and headphones, and the state appliance-
rebate programs have boosted our
appliance hookup supplies quite a bit.
TWICE: How will Walmart’s renewed
emphasis on CE products affect business?
Walmart will continue to
have a big impact in the CE marketplace,
but that doesn’t mean that our
dealers can’t compete. Petra dealers have
an advantage because we focus heavily
on providing unique profit solutions
so they can remain competitive in today’s
marketplace. We work with dealers
to be proactive in setting up strategic
product models, kits and accessory
bundles that are specific to them.
Ultimately, our dealers are very customer-
centric — they have the huge
advantage of being on the floor getting
customer feedback every day. The combination
of that feedback and the flexibility
to change a product mix quickly
based on customer requests has always
been our dealers’ key to success against
a large competitor.