Maybe it is lingering effect of being in a recession for too long, or the pressures of preparing for the fourth quarter, but here for your consideration are a few items that illustrate the mood and trends flowing through the industry now.
Crystal Ball Cloudy On CE’s Q4
Surveys that were released last week provided a foggy picture on holiday sales. A CEA-CNET poll said “consumer confidence in technology” was up 6 percent in September, indicating they are willing to buy more CE products.
Maybe they will be buying more PCs. A Gartner study thinks so. The study said more PCs will be shipped this year than previously expected, with unit volume only being down 2 percent by year’s end vs. a predicted 6 percent drop. Netbooks will help drive the market .
Retail Forward prognosticated CE being down along with apparel and home goods in the fourth quarter. Specifically, CE stores are expected to experience the biggest declines, due in part to Circuit City’s exit. Maybe the CE store channel will be hurt due to one major player being gone, but anyone selling CE - regardless of classification - has benefited due to the demise of the national chain and absorbed its market share.
I’ll wait and see what CEA’s usually accurate Holiday Sales Forecast says in October before anticipating gloom and doom or sunshine and rainbows.
Majaps Biz Not Thrilled With Clunkers
You would think manufacturers and retailers would be thrilled with the proposed $300 million cash for white-goods clunkers program. Think again. Many are saying thanks but no thanks. The main problem is this is a state-by-state program, which will cause administrative problems for multiregional chains. And the industry thinks it will go through the $300 million due to consumer demand. Interestingly, the program was first authorized as part of a 2005 energy bill but was never funded. (How could it be authorized but not funded? Politics.)
Went To A Ballpark & A Trade Show Broke Out
I attended M. Rothman & Co.’s Annual Dealer Appreciation Event last week up in the Bronx at the new ballpark where the New York Yankees play. The distributor’s event drew plenty of CE manufacturers and dealers. Bill Rothman, executive VP, mentioned that the company is expanding its housewares lineup, creating a new division to handle it, to provide dealers with another category that can provide margins. As we wrote about in our Sept. 9 issue, some retailers are seeing synergies in merchandising CE and furniture and in our last issue retailers of all stripes. Other dealers are either picking up CE categories they haven’t carried before, or dropping CE space. Why? Profitability. You can’t pay the rent or salaries with market share.
What Took Sam’s Club So Long?
Saying the new policy was both a “business decision” (of course) and a way of “better meeting club members’ needs” (please) Sam’s Club had decided to cut its open-ended return policy to three months for CE. The question is: What took it so long? Costco did it two years ago after it got flooded with returns.
This column originally appeared in the TWICE print edition of Sept. 28, 2009.