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NECO Sales Soar Despite Retail Slump

Despite an industrywide downturn in white goods this year and an uncertain national economy, members of NECO Alliance, the Northeast buying co-op for independent dealers and a division of the Nationwide TV & Appliance buying group, said year-to-date sales are up by double digits.

While most consumer electronics suppliers and retailers are toning down forecasts for the fourth quarter, NECO members are bullish on the quarter and the year, claiming that the group has achieved the buying clout of a big-box retailer.

“We’ve been told by a major supplier here that we are their biggest customer in the Northeast in appliances,” said Jay Lebowitz, president of Intercounty (one of five NECO member groups).

At the fourth annual NECO Alliance Fall Expo, held last week at the Foxwoods Resort & Casino here, David Cohen, president of Nationwide of Connecticut noted, “We expect to be up head and shoulders over AHAM this year. NECO is 23 percent ahead of AHAM numbers now. We’re up 16.5 percent over last year and AHAM is down six percent. Our mix is growing in the high end, and we’re becoming more balanced between brown and white goods.”

NECO leaders unanimously attribute the group’s success to its warehousing strategy that now provides members with more than $100 million in inventory, allowing independents to compete in product availability and pricing with the big box retailers. The Alliance also pushed heavily into group merchandising this year, securing several exclusive rebates and financing programs with suppliers for the first time, said executive director Mel Hunger.

Added Cohen, “The independent dealer has always been skilled at closing the sale, but we had problems getting footsteps into the store. With the [new] NECO programs we’ve increased our footsteps tenfold.”

New fourth quarter programs include exclusive zero-percent financing and/or rebate offers from companies including Sony, Panasonic, GE, Frigidaire, Fisher & Paykel and Jenn-Air.

Despite the somber mood in most of the consumer electronics and appliance industry, NECO members said they are confident sales will continue to rise in the fourth quarter. Sales were off for a week after the Sept. 11 terrorist attacks, but members said they expected September to finish flat or slightly up over last year.

One of the hardest hit member groups, Intercounty, said two of its stores were located near Ground Zero in lower Manhattan and will be forced to relocate.

Hunger said NECO members continue to push into the category of digital television and into high-end white goods. Several members said their sales mix was currently 85 percent to 90 percent white goods, but with the increased push into larger screen TV the ratio could shift to 75 percent white and 25 percent brown in the next couple of years.

“We’ve had a resurgence in brown goods … You’ll see a lot more people putting money in home entertainment this year because they are traveling less, so dealers who have been slacking off on displaying brown goods are now getting into it,” Lebowitz noted.