Given what they’ve been through during the last 12 months, most dealers are more than ready to ring out the old year and bring in the new. Our roundtable of regional dealers recently shared some of the strategies they used to survive 2009 and what their business plans entail for 2010. Most are cautiously optimistic about business in the next 12 months and see lingering unemployment as the major drawback. Here’s what they had to say:
Dealerscope: How much were electronics and appliance sales up or down compared to last year? How about profits? Were there any categories that come to mind that sold surprisingly well?
Terry Oates, President, King’s Great Buys Plus, Evansville, Ind.: The first part of 2009 was flat, both from volume and profit perspectives. September and October have been outstanding – substantially better, ridiculously better, than last year.
Categories across the board have been good. We’ve been aggressive. Customers are responding only to legitimate value these days. Margins have been chinked a little bit but volume has offset that. If I had to categorize the last three months, I’d say I’m pleased, and cautiously optimistic.
Trey Thofner, President, Jetson TV & Appliance Center, Vero Beach, Fla.: Appliances held their own; we added a store so we were up in total stores. If you looked at existing stores, business was almost flat. In electronics, we’d been just TVs for a while and added other categories that were easy to move into (when we joined the PRO Group) so we could increase our attachments to TV sales. While cable was easy, audio was a learning curve since we had only been selling home theaters in a box. But we just recently saw audio numbers up. In October 2008 we sold $9,500 in home theaters in a box audio last year; this October, we sold around $50,000 in the audio category. With the addition of our new store, we should be over last year in sales this year. We have profitable opportunities going into the holidays. We weren’t as hard hit as some of the other areas of the country.
Eddie Maloney, President, Cowboy Maloney’s Electric City, Jackson, Miss.: Sales were down compared to last year, but our retail business was up. Probably about 20 percent of our business is builders business, and as everybody knows, that was way off. About 80 percent is retail, and that business was up. TVs did well. Our appliance business held pretty well considering housing starts were down so far. The high-efficiency upgrade appliances did well in a really tough market because people realized they could save money on their utility bills, with front-loading and high-efficiency top-loading washers. But I wouldn’t say people were really that "green conscious." They were more "money-green conscious" than "environment green."
Burt Krieger, President, Boscov’s, Reading, Pa.: The appliance business was down because of the lack of housing starts and slower home sales. Also video/electronics business has been down. There was no urgency for the changeover to digital that existed last year. Consumer demand isn’t as elastic as it was then, with people anticipating that they would have a TV that wouldn’t work. Because of the economy, there’s been a pullback in what we perceive to be equal-value pricing. We’re trying to maintain the business at a profitable level, and that has resulted in a total lower volume for us, because we’re not chasing things below cost or doing irrational things. But we’re trying to be competitive at the same time. So those things, together, have resulted in a down business, although we were up in the last week of October.
Some bright spots were smaller screen sizes, 32 inches, especially. We used to cut our teeth on 42s and 50s; both have been down a bit but the smaller sizes, where the price points are more affordable to almost everyone replacing the bedroom TV.
Keith Saunders, District Manager & Electronics Buyer, Queen City Audio Video & Appliances, Charlotte, N.C.: Sales dollars were flat to a little above last year, and profitability is looking better. There were no shining stars in terms of categories. LCD panels kept us busy, as well as TVs 46 inches and up; 32-inch has been good, too.