The headline for my column in TWICE’s last issue for 2008 was “Good Riddance.”
Forgive the repetition, but there isn’t any other way to describe what happened at retail in the CE industry (and plenty of other industries by the way) during 2008.
For most of the year, the industry endured the constant stream of speculation and bad news coming from Circuit
City. That, and the acrimonious way the once-proud retail innovator Tweeter met its demise, put a pall on the industry as a whole. (Not to mention all the consolidations and losses among top manufacturers.)
With the economy floundering — at best — during the first half, it was still a shock to everyone to experience the sudden and massive crash of the world economy by autumn.
Presidential election years are always good for CE products and the industry is almost recession proof … right? Well, we found out in 2008 that the answer was a resounding “No!” Suffice to say that all this news didn’t put anyone in a holiday shopping mood, no matter the deals, and everyone took it on the chin.
As we look back four and half months after 2008 ended we are experiencing an economy that is ever, ever so slowly bottoming out and waking from its deepest recessionary hangover in recent memory.
But as the TWICE Top 100 CE Retailers Report shows for 2008, business was still up, though at a paltry 3 percent, to more than $126 billion. I say paltry because according to our Report for 2007, the Top 100 had 7 percent growth. Even among the Top 25 retailers on this year’s list, even the healthy ones, there are plenty of negative sales numbers to go around.
One of the big issues for 2009 will be what will happen to Circuit City’s market share of $8.4 billion, along with the likes of Tweeter’s ($212 million). Let’s not forget Rex ($124 million) which is exiting CE via its deal with Appliance Direct. Will the lion’s share go to Best Buy and Wal-Mart (which is eager to be No. 1 in CE) or to the regional players on this list? Or will the independents — which always seem to fly under the radar — gain more share and customers?
Looking back at 2008 there were a few dramatic retail winners last year: Apple and Amazon had major sales gains and earned Top 10 status.
When Circuit City pulled the plug I blurted out in a column that we likely won’t see again an independent CE retailer grow to a regional chain and go on to gain national status. Maybe I was wrong.
Take a look at hhgregg. The once-family-owned and now publicly owned retailer has the same type of birthright, is ranked No. 22 in this year’s report, with a 17.6 percent sales gain, and plans to expand — all of this during the recession of a lifetime. I’m not saying hhgregg will go national, but they have the potential if they play their cards right in the next couple of years. As we all know, this industry is always full of surprises.
So when you take a look at our full report, with analysis by senior editor Alan Wolf that starts on p. 15, you can draw your own conclusions on this and many other retail issues facing the industry.
My thanks go to Alan, our research partner Bob Tancula and his team with the Stevenson Group, as well as our managing editor John Laposky and associate editor Lisa Johnston for doing a great job in putting together this year’s report.