Scottsdale, Ariz. — Despite a decline in membership, the MARTA Cooperative of America is enjoying its best year in recent memory, with group volume up and most owner-dealers seeing solid gains in sales and profits in both brown and white goods.
Executive director Warren Mann, who presided over the $2 billion buying organization's summer show and conference last week at the Fairmont Princess Resort, here, said attrition through retirement and defections due to aggressive recruiting by other groups has brought MARTA's 93-member roster to its lowest level since 1999.
Nevertheless, growth by individual dealers like South Dakota's 19-store Karl's, and the addition of new market-leading members, has more than compensated for the membership decline with greater group volume. “The average size of our members has grown significantly,” Mann said.
Indeed, Mann now compares MARTA to NATM Buying Corp., whose membership, though small in number, dominates their respective trading areas. Top MARTA markets include Florida, where member dealers DeSears, Jetson's and Jersey Jim Towers hold the No. 2, 3 and 4 slots behind NATM's BrandsMart U.S.A., and New York State, where Orville's is No. 1 in Buffalo and Jer-Mel is tops in Syracuse.
Building on its traditional strength in the Midwest, MARTA has also become a major player in the Mid-Atlantic States, Mann said.
That local market leadership, plus MARTA's “focus on merchandising core brands,” has made the group a favorite with key vendors, he noted.
Overall, Mann said MARTA is enjoying its best year since he joined the group six years ago, and is picking up market share for the first time in a decade. “It took 10 years to build up our defenses against the nationals” through sharper merchandising and protected lines. Internally, “things are working as smooth as glass,” he said, while dealers are “more prone to pull together now. I've never seen a harder working group of people.”
The efforts are paying off in strong gains in both white and brown goods. On the appliance side, sales volume is up 8 percent year-over-year, Mann said, far exceeding the industry average, while business is up with each of the top four majap vendors for the first time in MARTA history.
In CE, average tickets are up for most members thanks to brisk sales of microdisplay and flat-panel TV. More than half of the group's flat-panel sales are HD models, Mann reported, which has helped maintain margins on plasma and LCD panels. He commended members for their quick changeover to HD and flat-panel technologies, after having missed out on early VHS and DVD opportunities in years past.
The group is also experiencing growth with all of its CE vendors, he added, although JVC and Sharp led the pack with high double-digit gains.
Mann said MARTA's board is troubled by the aggressive recruiting tactics of other groups, which have targeted specific dealers and, in the case of one rival organization, regularly misrepresent MARTA's member status and buying clout.
Nevertheless, the board has decided to take no action. “Our programs speak for themselves,” Mann said. “We know the pricing and programs for all the groups, and our programs are better merchandised.” The group's CE programs, for example, “outstrip any other group for cost, focus and selection.”
He stressed, “For us profitability is key. We're a non-profit organization with lower overhead, and we put our funding into core programs.”
By drilling deeper on fewer models, MARTA provides significant savings for its dealers year-round, rather than limiting opportunistic buys to “flashy show deals,” Mann continued. He also gave credit to the group's buying committees, which are comprised of a “talent pool” of experienced dealers of mixed size, rather than hired “gunslingers” that make the merchandising decisions for other buying groups.
Elsewhere, MARTA welcomed new members Riester's General Store from Auburn, N.Y., and AM Royal from Fairfield, N.J., plus new exhibitor Serta, while John Mistak of Walter's Home Appliance stepped down from the board after 25 years of service, to be succeeded by Julie Oswald of Appliance Center of Toledo, Ohio.
New developments included a planned increase in group purchases and new furniture initiatives, while debut show events included a Passport Program that awarded Toshiba GigaBeat MP3 players to dealers who visited at least 12 exhibitors. The group also conducted a marketing luncheon that awarded wine coolers to dealers with the best new marketing ideas, and held its first-ever auction on a number of truckload, multi-piece and single SKU products that were offered by vendors at below show program cost, with the difference earmarked for convention activities.
Other show highlights included an address by former Ultimate Electronics CEO and current Warrantech marketing VP Dave Workman on attachment sales, and a presentation by Toshiba marketing VP Scott Ramirez on coming changes in the TV marketplace as affordable flat-panel begins edging out other formats.
MARTA's membership will next convene at the Sea World Renaissance resort in Orlando, Fla., Feb. 22-25, 2006, followed by an Aug. 13-17 run at the Arizona Biltmore in Phoenix.