Tustin, Calif. — BrandSource is anticipating a so-so holiday season for the CE and appliance industries.
Executives at the $13 billion buying and merchandising group for independent dealers are forecasting moderate sales gains next quarter, driven by aggressive vendor promotions and steep price moves in 4K TV.
“This industry has still not recovered from The Great Recession,” which has been a stress on BrandSource members and their families, noted Bob Lawrence, the group’s outgoing CEO.
At a press briefing during the group’s Fall Convention & Expo, held last month at Caesars Palace in Las Vegas, Lawrence predicted that holiday business will be “OK,” and expects it to “tick up” in the fourth quarter.
On the appliance side, executive VP John White forecasted low single-digit comp sales increases for the November through December period as a “best-case” scenario, citing restrained Labor Day orders, a soft laundry market, and the migration of the mass premium segment to a mass-market tier as “the middle class continues to disappear.”
In CE, Jim Ristow, co-president and chief business officer of the group’s ProSource specialty A/V and custom integration division, predicted “good” holiday sales, albeit driven by deep discounts as “vendors will get very promotional.”
Indeed, prices on some Ultra HD TV models have already fallen as much as 40 percent over the past three months, he said. The new affordability will help BrandSource dealers sell more 4K sets between now and year’s end than they have since the technology was first introduced, while still realizing higher average selling prices (ASPs) overall.
Not yet ready for primetime, however — at least among the rank-and-file TV and appliance dealers — are more esoteric technologies like home automation and wireless multiroom audio, Ristow said. Those categories remain in the wheelhouse of ProSource’s custom installers and integrators, for whom business is going gangbusters. The biggest issue for these members, he noted, “is finding enough people to hire, the business is so strong and so good right now.”
Despite the modest holiday forecast, Lawrence said BrandSource is still outperforming the industry in most core categories, while still garnering the highest ASPs across most of retail.
Specifically, sales growth at BrandSource vs. the industry is 4.8 percent to 3.5 percent in furniture; 4 percent to 2.5 percent in bedding; 13.2 percent to -8 percent in legacy audio; and 2.6 percent to 1.8 percent in appliances.
TV volume is on par with the industry at -4 percent, Lawrence said.
See the complete story in this Monday’s edition of TWICE.