Tech Retailers See Mid-Year Resurgence - Twice

Tech Retail On A Roll

CE experiences mid-year resurgence
Author:
Publish date:
The TV business may have taken its lumps in recent years, but it’s still No. 1 with consumers this holiday.

Updated! The worm has turned for CE retail.

After a period of fits and starts, figures from the U.S. Census Bureau and a powerful second-quarter earnings report from Walmart confirm what we’re hearing anecdotally: that tech dealers are participating in the economic expansion.

A chief indicator is the Census Bureau’s monthly retail sales estimates, where CE and appliance dealers have largely lagged their peers. Not so in July, when the specialty channel bested furniture stores and other key retail sectors with a 4.2 percent sales gain over last year, to some $8.3 billion.

Walmart too surprised, with a way-better-than-expected second-quarter earnings report, covering the three months ended July 31. Comp sales for CE were the strongest in four years at the discounter’s titular big-box U.S. stores, the company said, due largely to an expanded assortment of TVs, audio products, wearables and gaming gear.

All told, net sales rose 5.2 percent at Walmart U.S., to $82.8 billion; comps increased 4.5 percent, representing the best performance in more than 10 years; and online sales soared 40 percent amid greater investments and new initiatives.

See: Walmart’s Virtual Shopping Tour Is Waiting To Take You Away

While Walmart paid a price for those gains — the company suffered a net loss of $861 million in the quarter — and the impact of tariffs still looms large, the macro-economic tailwinds remain brisk.

“Customers tell us that they feel better about the current health of the U.S. economy as well as their personal finances,” Walmart president/CEO Doug McMillon said in a quarterly recap. “They’re more confident about their employment opportunities. And, with warmer weather, sales of seasonal items like pools, air conditioners, swimwear, and gardening supplies really popped in May compared to April.”

Related: Record Temps Send AC Sales Soaring

McMillon’s observations echo other reports from the field.

“We’re enjoying a really, really nice momentum right now,” said Starpower principal Daniel Pidgeon, following a six-month stretch of flat sales. “I would love to say it’s us, but there’s genuine consumer confidence; people feel good about buying again.”

Likewise, CT Hall of Famer Tom Campbell, speaking on behalf of Los Angeles electronics chain Video & Audio Center, said “We haven’t seen this kind of traffic in the last year.” Business has more than doubled year over year for the past two consecutive months, the corporate director told TWICE, as the economy and consumer confidence continue to grow.

And perhaps the best evidence of a retail revival: “The restaurants are packed and mall traffic is skyrocketing,” Campbell reported.

Featured

Related Articles