Quarterly Retail Sales Report
...advanced to $2.53 billion compared to $2.47 billion. Respondents to this quarterly survey reported that bitter cold throughout much of the country did little to dissuade customers from buying during this year’s shortened holiday selling season. Summing up the sentiments of many, one retailer from New York remarked, “Retail sales have been volatile all year, and the holiday shopping season was no exception. Lots of ups and downs, but in total, sales were acceptable.”For complete Q4 sales data, order the Quarterly Retail Sales Report.
Many commented that the final month of the holidays found a fair number of shoppers turning up at traditional stores—and increasingly on the internet—eager to tap the deep discounts and eleventh-hour bargains being offered. “I thought the discounting from last year could not possibly get worse. It most certainly did this year,” said a dealer from Sacramento, California. “Customers are cross-shopping with all the online retailers to get the best price. I don’t think any customers paid for freight on any music gear this quarter.”
Government data shows that U.S. households were resilient throughout much of last year despite higher payroll taxes, which sapped spending power. Many Americans have been buoyed by rising home values and a strong stock market. While the results are encouraging to economists looking for signs that American consumers are healthy enough to keep the sluggish recovery moving ahead, underlying demand hasn’t been strong enough to allow for higher prices or help the bottom lines at many retailers. “We’re battling price and margin erosion every day,” said a music store owner outside of Edison, New Jersey. “Consumers have more money, but they are now empowered through their smart devices to negotiate every purchase.” A dealer from Raleigh, North Carolina added, “Two years ago I had never heard of Amazon Prime. This year I think at least half of my customers brought it up in terms of comparison shopping. We have to figure out a new way to compete.”
This year will be remembered as a tipping point with internet sales eclipsing sales through free-standing music stores in a number of product categories. “We’re holding our own in guitars,” said a retailer from Chicago. “But anything that has to do with computers, DJ and recording equipment is now primarily sold by web-based retailers. Based on the inquiries we see in our stores, you’d think there was no market for these products.”
Retail sales results for most product categories during the quarter were positive: fretted instruments (+4.2%), instrument amplifiers (+1.4%), sound reinforcement products (+2.2%), percussion products (+2.5%), accessories (+7.1%), school music (+3.6%) and portable keyboards (+2.7%). Modest declines were limited to: grand pianos (-.3%), church organs (-2.5%), and home organs (-4.5%).
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