MARTA Cooperative Of America celebrated a strong 2004, and discussed industry conditions, merchandising and membership changes during its annual winter meeting at the Gaylord Palms Hotel, here, last week.
Executive director Warren Mann reported annual sales of “around $2.1 billion” for his buying group which consists of “about 100 members” and operates 500 storefronts. Sales for MARTA, by product category, are as follows: major appliances, 40 percent; consumer electronics, 25 percent; furniture, 25 percent; and “other,” which consists of lawn and garden items and a variety of categories, 10 percent.
Stopping short of saying that 2004 was the best year ever for the four-decade-old group, Mann said, “It was the best year since I have been here ,” the year he took over as executive director.
Mann said that in CE, MARTA’s members had a 15-percent gain in sales during 2004, mostly from HDTV and big-screen TVs, 5 percent better than the industry. By brand, Mann said, “Our Toshiba sales [MARTA’s largest CE supplier] were up 27 percent. Thomson was flat, while JVC was up 22 percent, and Sharp was up 4 percent.”
So far 2005 has been “the same as 2004. Sales are strong” for HDTV. While MARTA does more custom installation than ever before, Mann said, “Our CE sales are up yet the demand for component audio is still not there.”
The big growth area that he sees coming this year is HDTV for rooms other than the family or living room. “After you buy a 52-inch HDTV in your main viewing area and then go to your bedroom and see a conventional 4:3 analog, you want HDTV there. You’ll get rid of the old black and white in the beach house or the garage and buy a 30-inch glass HDTV with integrated tuner for $499. It might not be flat, but it has an HD picture.”
A big concern is the price erosion in DLP. During the past four months pricing at retail has dropped $1000, to the consternation of Mann and various suppliers. “Prices went down almost in lockstep. We are the retailers. Let us make the retailing decision and give all of us an opportunity for profit. I can tell you that if Toshiba, for instance, charged $200 more [than the current DLP price], we could come up with plenty of reasons why a consumer should step up to that brand.”
As for major appliances, “We were up 9 percent and the industry was up 7 or 8 percent.” By brand name Electrolux’s Frigidiare, MARTA’s largest appliance supplier, had a 16 percent increase in sales during 2004, while Whirlpool was up 6 percent, GE up 2 percent, and relative-newcomer LG was up 30 percent.
In discussing the major appliance retailing landscape with his troops, Mann noted that for 2004 “Sears was down, Best Buy was flat, yet independent [retailer] sales are supposed to be down 5.5 percent. We’re not down. P.C. Richard, H.H. Gregg and BrandsMart are not down. How can that be?”
He continued, “It appears that the real 'mom and pop’ stores are getting crushed by major appliances, as chains like Lowe’s go into secondary and tertiary markets. They never have had to go against larger retailers like that.”
As for the beginning of this year sales have been good in major appliances “for the four major brands. There was little inventory left over at the end of last year.” But there is some concern about appliances for 2005 on the part of some members, Mann said.
In his informal discussions with member dealers, Roger Van Vreede, owner of Van Vreede TV & Appliance of Wisconsin and chairman of MARTA, said several reported good sales of appliances overall and hope for another strong year.
In furniture, MARTA reported it has discussed partnering with buying groups in that category and has considered starting its own furniture division, but so far Mann reported that nothing has been decided. The group invited such suppliers as Sharut Furniture and Convert-a-Couch to its trade show to see if there is any interest on the part of its members to get more involved with the category.
No matter the sector, Mann’s message to suppliers that it is in their best interest to sell to MARTA and other independent retailers because “We can build brands and sell features. Can the self-service retailers do that? They can’t but we do.”