Q2 Sales Post Strong 4.1% Gain
...climbed to $1.251 billion compared to $1.201 billion in the same period one year ago. The accelerating growth of e-commerce continues to reshape the industry with retailers citing Amazon.com as the top competitor. Sales at online retailers reporting to this survey advanced 14.2% for the quarter compared to brick-and-mortar dealers, where sales contracted 3.7% compared with the prior year. The majority of retailers reporting to this survey have been grappling with a proliferation of discounts, which make it tougher to record year-over-year sales increases. “I know that the economic trends of a stronger housing and job market should boost retail,” said a dealer from Nashville, Tennessee. “But the reality in our market is the business is now being spread over so many different platforms: eBay, Reverb.com, Amazon.com, and Craigslist to name a few. It’s a challenge to stay relevant with your customers today.”
On a geographic basis, retailers based on the East Coast posted the strongest results rising 4.5%, followed by retailers in the North Central region +4.2%, West Coast 3.9%, and South 3.7%.
The 4.1% gain recorded by the music industry during the quarter puts it right in the middle of a mix of other retail industry averages reported by the U.S. Census Bureau. Second quarter results reported by other retail industries include: building materials +6.4%, sporting goods +6.8%, furniture +2.7%, auto parts +1.0%, apparel -.9%, and appliances -4.7%.
The fretted instrument category recorded its largest quarterly gain in five years, advancing 7.1% to $186 million. Comments from dealers describing the increase point to firming demand for Fender products, growing demand for mid-priced acoustics in the $600 to $1,000 price range, and uninterrupted demand for ukuleles. Instrument amp sales reversed sluggish growth for the past two years, rising 5.5%.
Accessories sales posted the largest gain for the three-month period, rising 9.5%. “Five years ago we sold just a few headphones; now they’re right up there with my stand and string sales,” remarked a dealer from the Boston area. “We just keep on adding a lot of great products to our accessory offerings.”
Gains for sales of school music instruments were not far behind, increasing 8.7% for the quarter. “This is the first time in a very long time that my key manufacturers are actually sold old, unable to follow through on master orders,” offered a dealer from Dallas, Texas. “I guess it’s a sign of a very strong market that has caught a lot of people by surprise.”
Keyboard retailers reported lackluster results for the quarter, with key product groups showing the following changes: grand pianos +.1%, vertical pianos -1.5%, portable keyboards +3.1%, digital pianos +4.3%, home organs -4.5% and church organs -2.7%.
Print Music sales posted a 3.5% gain for the quarter, following four consecutive quarters of sub 1% gains. Other reporting groups in the survey included: sound reinforcement products +1.2%, electronic music products +3.0%, percussion products +1.7%, and recording products +1.7%.
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