The news from the NECO Alliance, the Northeast buying group organization, is similar to other groups of independent retailers: business remains strong and the group wants to emphasize consumer electronics now.
NECO, which is affiliated with Nationwide TV & Appliance buying group, held its Fall '02 EXPO VI at the Foxwoods Resort & Casino, here, last week and the mood was decidedly upbeat. NECO consists of around 500 retailers from Maine to Delaware and as far west as Harrisburg, Pa., with sales of more than $1 billion annually (75 percent in appliances and 25 percent in electronics). NECO has members from five chapters: ADC of New Jersey; DMI of Brooklyn, N.Y.; Intercounty Appliance of Long Island, N.Y.; Nationwide of Connecticut; and the Boston Group of Franklin, Mass.
While NECO did not reveal total annual sales for the group, executive director Mel Hunger said with a smile that the sales performance of this organization this year "has been so good, it's been scary."
Jay Lebowitz, president of Intercounty, said that reports of a slowdown in retail sales during the summer did affect NECO members. "But business is still up over a year ago. Instead of double-digit increases, we now have strong single-digit gains," he said.
He noted that the key to NECO's recent success against larger regional chains' national competitors is "NECO's ability to produce strong programs and provide sales training. We are better trained to close sales."
Richard Merhige, Intercounty's treasurer, said today's NECO members and today's independents are "more astute businessmen."
"When you talk to our members today they have made capital investments with better, newer stores," he said. "National chains are price-driven with limited selection. Independents know how to sell up."
And he added, "The term 'buying group,' just doesn't describe us anymore. We are a merchandising group and we have our own plans, plus the support from Nationwide [TV & Appliance] to help us."
Hunger explained that what NECO provides is "not just co-marketing with vendors. We bring manufacturers to our own chapters to discuss how to stock specific product categories, present POP, handle merchandising, signage and templates for our programs. It is coordinated one-stop shopping for our membership."
Hunger stated, "What we provide is consistency of presentation. We get our members involved every month with new POP, circulars and sales training programs."
NECO and its members are pushing to take the step and enter HDTV in a big way this fall, with a variety of LCD, plasma and projection sets. As Hunger put it, "That is our future and we know how to 'up-sell' our customer base."
Lebowitz is bullish on HDTV and consumer electronics for NECO in the fourth quarter. "Most of our members are going into LCD and plasma sets. We should see sales increase during the fourth quarter," he said.
Mike Leese, Philips Consumer Electronics' sales general manager for buying groups, saw the interest in plasma and LCD sets by NECO members, and he likes it. "We are showing plasma, LCD and DVD players here. [NECO's] assisted sales floors help them sell products like this effectively. CE sales for guys like these start heavily in the fall, since they are more white goods oriented," he said.
But Leese added, "However, we see independents coming back into CE in a big way because they see the profits here, as Philips does."
On the appliance side, Bernie Tymkiw, executive VP of Haier America, recognized the strength of independent retailers in today's economy. "They can adapt better than mass merchants or large chains. Independents can take products with their selling floors and tell customers how to get the most for the budget. They can sell up and sell down. They can fit the needs of a budget and find alternatives."
He added, "I don't see or hear the 'doom and gloom' mentality you used to hear from independents several years ago. Many more of them are with groups and have sales floors filled with people who know how to sell."
Bob Walsh, executive VP of Karl's Sales & Service of Fairfield, N.J., specializes in major appliances with six stores doing $50 million in annual sales. He noted, "We sell high-end appliances. Could it be cocooning? Who knows, but home sales continue to grow and consumers are interested in investing in their homes. People are still upgrading their kitchens and investing in them, which continues to drive our business."