Note: This is a very long, comprehensive snapshot of what was going on with retail sales of music and equipment. It gets very much into what was selling in 1974, and a guess of what might happen in 1975 from the retailers themselves. Quad is discussed all through the article.
When you see *** it designates that a new store is being discussed in the same city.
January, 11, 1975
20 Market Dealer Survey
CHICAGO
United Audio Centers have seen a jump in the average systems sale from $500-600 a year ago, to $900-1,000 this year while low end systems are moving very slowly. Most popular systems for Cliff Johnson, manager, includes Melntosh electronics, JDL Jubal speakers, and Dual or Thorens changers.
Johnson mused that since people are not spending on automobiles, they are upgrading their home entertainment purchases. Impulse buying is out as customers carefully research quality and trade-in value.
On the whole, prices are up, but the same money buys better equipment: for example, the Sansui discontinued 8-deluxe was fairtraded last year at $599, but the replacement model 881, with the same power specs and tuning is listed at $499.95, the cost savings due to the introduction of circuit board module (CBM) construction.
Records are carried at one store only, as a draw to the young crowd, and at break-even prices. The inventory includes 1,500 pop LPs with limited jazz, classical and quad selections, for fast turnover.
United Audio is following a very conservative approach on inventory for 1975, and dealing only with manufacturers who offer decent terms and do not double up on orders. The outlook for 1975 is optimistic, with big ticket items such as separate components rather than integrated receivers, and reel-to-reel tape machines, expected to carry the year.
***
The addition of 8-track record feature on hardware has raised sales of 8-track and cassette blank tape by 35 perecent this year, for Community Family Stores buyer Sam Velato. Another factor in the surprising increase, Velato feels, is the hard line the industry has taken against tape bootleggers.
The 8-track record feature has also caused a turn-around in cassette and 8-track ration from 60/40 last year, cassette to 8-track, to 60/40 this year, 8-track to cassette.
A lackadaisical six percent increase in records this year over last is due, Velato says, to less releases, no giant selling group, and a very tight inventory control that was checked twice weekly.
Consumer anxiety about the economy can create what the consumer fears most in 1975, but Velato believes the business is there if good product is introduced.
No information was available on the low end line of Communtiy stereo equipment.
SAN FRANCISCO
Kirk Bradford at Lafayette Radio Electronics says, "we're doing as good if not slightly better than last year in unit sales.
Calculators were the star for us and a lot of four-channel moved for us also. We're in a unique position because Lafayette receivers were the first to come out with advanced SQ four-channel and this gave us the jump on a lot of people.
"Now everyone else is starting to have the same circuitry
Lafayette has, but that has helped us do even better because the other receivers cost considerably more for the same specs. That factor, I think, will enable us to keep doing better business in 1975, because people are going to be buying more wisely, and Lafayette products are the best value.”
Bradford is upset about the lack of promotion on quad, particularly, as he put it, "on the label's end of the business. Columbia could do much more than they are. You call a record store and ask about SQ and they don't know what it is. You call a radio station to ask if they're playing an SQ album and they don't know what you're talking about."
Bradford says also that "people are getting hip to the fact that the cassette format is better than 8-track. and that cassette recorders have been among Lafayette's strongest items.
***
George Yahraes, marketing manager for Cal Hi Fi, which now has eight stores in the Northern California region, also cites cassette recorders--particularly the Dolbyized units--as his strongest mover. He particularly praises the TEAC Creative Center tape unit as an aid in demonstrating to people the possibilities of tape (Billboard, Dec. 7).
Yahraes says that Cal Hi Fi's sales were "up substantially" through most of 1974 except for the last quarter, which dropped off 15-20%. He sees that lower level of sales continuing for at least the first half of 1975.
Yahraes says the trend is better sales at the higher end of his line-in the more sophisticated gear. "Apparently what's going on, is that people who had the money still have the money, and they're spending it. Also people who might have bought an average set are now putting some extra bucks into their systems because they now see it as an investment that they will have a long time. Once they have it they don't have any additional costs. They listen to the radio or buy records once in a while.
“Our impression is that people are probably staying home more, saving money on restaurants and concerts, and they feel that if they're staying home more they deserve better equip-ment. In most of our stores the average amount spent on a system is at a higher dollar value then before. Of course part of the reason for that is that the people are being most hurt by the economy, the people who would have bought at the lower end, now they can't afford to buy at all."
On quad: "People are still confused by the two systems and not that many are coming in asking about it. A lot of the receivers and cartridges we're selling are 4-channel but people are not buying them in systems. They're using them with two speakers now but are looking to the future when they might want to change.
***
Stan Goman, manager of Tower Records' main store, says that,
"even figuring inflation we're up 20 percent over last year." The sales leader at Tower is soul music: "Soul is up like crazy. Our sales have doubled, maybe even tripled. Everybody from Stevie Wonder to the Olympic Runners. Of course soul has always been a good seller in San Francisco but I've never seen it sell like this year."
Quad record sales are steady, says Goman. "We'll always order a box of, say, Aretha on quad, or Elton, or Dave Mason and then be re-ordering 5-10-15 every month or so. But then we're the only people in town that keep a good selection of quad. Goman's outlook for next year: “Well, the depression is here.
Let's face it. And during a depression the entertainment business goes up. So I foresee no problems.
"I think jazz will keep crossing over more heavily in 1975, like soul did, and I think there will be some big jazz albums.
We've sold tons of the new Stanely Turrentine record. We're selling a lot of George Benson. I think the Blackbyrds are a coming thing. Whenever a good commercial jazz artist comes into San Francisco we sell a lot of their records.”
OAKLAND, Calif.
H. Waldren, manager of the stereo department at Montgomery Ward here, says his record sales were about the same as last year, and that, counting inflation, sales of stereos, radios and recorders were down about 10 percent. Cassette recorders were strong, along with solid-state color TV.
Quadraphonic sales were not what Waldren hoped for. "The lack of soft goods is killing 4-channel. People who have quad now are telling their friends that they can't find much discrete quad music. Now we do sell a fair amount of matrix 4-channel music but I don't consider that true quad."
As for types of music, Waldren says that even though he is in a location where black music has been the big seller, "country music has come along very well and this year we've had several good country music promotions."
For 1975 Waldren sees a "very strong continuation of sales in TV, but I look to see audio take a bath next year-maybe down 20 percent by spring. We've reached a point where TV is now a necessity but stereo is still a luxury. And with the economy like it is, people are going to eat before they listen to sound.
BERKELEY, Calif.
Also across the Bay, manager Hale Milgrim at the Telegraph Ave. Discount Records store says that his business has "almost doubled" over last year and that some labels, like Columbia and Warner's, are up 60-80 percent.
Milgrim cites recordings by local Bay Area groups as something that has done very well for him, even if the music is not on a major label. "We like to promote local music," he says, "because it's a way to let people know we're not here just to make money. In fact we work on one of the smallest profit margins in the chain. Between Leopold's, Rather Ripped Records, the Berkeley Tower store and myself we're probably the lowest priced area in the U.S. People come into this area from San Francisco and San Jose because they know they can get records $I-$1.50 cheaper."
Milgrim is personally very interested in quad "and consequently we carry a full line of records, including reel-to-reel quad tapes, which isn't much, but it's a start. And we always move what we have."
As for 1975, Milgrim is "optimistic, because I have to be. Records are still a lot cheaper than buying a sweater, or most anything for that matter. I don't think the record industry will get hit really hard.
LAS VEGAS
The cry of most dealers and stores in the area- '74 is down from '73!
Garwood Van operates two Musicland stores in the city.
Bruce Adams, manager of the Sahara Ave. store, seems to speak for all retailers when he points a finger at the economy. "Business is down and the reason is the economy. When people can't afford to buy sugar, they're not going to spend as much as they did in previous years on expensive accessories for the music business.
"We are having trouble with the quad because of the economy." he stresses.”
“To purchase the unit that converts the stereo system into a quad takes a person of a certain income."
However, Adams reports that quad tapes did well but "the records do poorly." The confusion between matrix and CD-4 has to be settled, as the records go. That will help considerably, he feels. "A lot of the customers are very confused as to explaining the difference between discrete and matrix, and he buys a system that doesn't have one or the other. If that issue is settled, if there is only one kind of quad record and all equipment can play it, than business would be much better.
"I think the one thing that sold well is classical records," he says. "Classical LPs are steady sellers and we appreciate the business because we don't really have to depend on markets for that. He emphasizes, “the classical market is growing, and outsells or is equal to country and instrumental records sold."
Adams feels that the University programs have helped the sale of classical records. "Sales in classical haven't fallen off, they have increased," he reiterates.
"Around Christmas time Beethoven #9 and Brahms sells extremely well."
"Contemporary music is popular now, too," he added. Again he credited the Music Festival at the University of Nevada, Las Vegas with the sales pointing out that the University crowd has as much money to spend as last year.
Adams also mentioned that cassette tapes, Sony and Panasonic compact units sold well in 1974.
Speculating on next year Adams relates, "The lower priced quad units might sell well in '75. Compact quad units will go well and cheaper priced components and equipment, like some of the medium priced sets, might sell well."
CHARLESTON, W. Va.
More than a recessive economy was troubling West Virginia audio dealers as 1974 wound down. A prolonged coal industry strike cut severely into peak holiday sales. And here in the state's largest market an ongoing school book controversy further complicated an unsettled sales picture.
Dealers hoped to salvage some year-end dollar volume through increased repair and service activity.
“At least our service department is busy." notes Jim Hastie, an executive with Hoylman-Huffman, late in November. Hoylman-Huffman is a major chain, with four stores in Charleston and Huntington, the state's major markets. "People are bringing their equipment in for repair this year because they can't afford a new stereo," Hastie said.
How do 1974 sales size up with 1973? "Soft," said Hastie, "very soft. Both the coal strike and book protest have hurt us. The protest is keeping people home."
And how does "soft” translate into a percentage? Hastie again: "At least 25 percent off. Normally, by the end of November, we're off and rolling in stereo sales. But not this year. And we've added more stereo in 1974.
Hoylman-Huffman's spokesman adds that quad sales have been noticeably “soft” too. The film handles Webcor and Zenith consoles and components.
"Everybody in this area will tell you the same thing," Hastie said. But he's optimistic about 1975. As this survey was being compiled, ratification of a new contract was progressing well in the coalfields, and the textbook protest appeared to be winding down.
***
One of the stores hardest hit by the school book protest has been Galperin Music Co., a large, full-line music outlet located in the downtown district. But all was not gloom in the stereo department as 1974 waned. Spokesman John Rappold reports healthy consumer interest in quality, high-ticket components.
(They handle Sylvania/Magnavox and KLH.) Rappold's hunch is that a tight money situation turns people's thoughts to real value, quality, durability.
One other bright footnote to an otherwise dreary year-end picture here: Galperin Music had sold out all its 4-channel merchandise by late November and was hoping distributors could fill their orders before Christmas.
PHILADELPHIA
While business has maintained same levels in 1974 as it compares with the year previous, Robert Dinnerman, corporate vice president of Silo, Inc., and its wholly-owned subsidiary, Audio World, is highly optimistic that the new year, with its promises of innovations, will find sales levels rising in 1975.
While the economy in general has had its effects on all types of business, with marked price increases in other fields creating a marked buyers' resistance, it is significant that prices in the home entertainment field have remained fairly constant and will probably continue to hold the line in '75, according to Dinnerman. However, in spite of a gloomy economic picture on the national scene, Silo opened its 50th store, a warehouse showroom in Allentown, Pa., in early November (Billboard, Dec. 7).
In addition to the Silo Stores, with its discount major appliances and TV outlets in Pa., N.J., Del., Colo., Ariz., and Tex. the past year saw its Audio World, the sound centers for stereo, quad, record and tape players, enter a major expansion program.
In addition to the seven Audio World free-standing stores, some one-third of all Silo Stores have separate and distinct Audio World sections. And 1975 should find all Silo Stores wedded to the Audio World concept. While blank tapes are sold, no records or prerecorded tapes are handled by the stores.
What is highly significant in reviewing 1974, according to Dinner-man, is the fact that selling was largely "low and high end” with product in the middle-price range selling very poorly, just as it indicates that there are an increasing number of sophisticated buyers, and that manufacturers are doing a good job in bringing out highly marketable units that easily overcome price resistance.
While Dinnerman has complete faith in the future of quad, he admits that sales in ‘74 were not up to expectations. He blames the short quad dollar on the "low end and high end buying habits the past year, and feels that quad will develop into a major sales force in the industry.
CONSHOHOCKEN, Pa.
"When you consider that products in the home entertainment field- records. tapes and stereo equipment—still provide, by comparison, the maximum measure of enjoyment and pleasure for the least amount of money: and that the prices haven't gone up that much in comparison to general price rises, we can look forward with much optimism that 1975 will be an even better year than 1974," said Larry Rosen, who heads up the chain of six WeeThree Record and Stereo Shops. All six stores, with several others on the drawing board, are located in shopping malls in Philadelphia suburban communities and in nearby New Jersey.
While the outlook is good for 1975, the year just finished has also been good. While final figures are not complete as yet, Rosen said that
"it looks like a good 10 percent across-the-board increase in 1974 over 1973.”
"We make sure that we only buy what we can sell." says Rosen. He also observes that the traffic flow has remained fairly constant—the young are buying and the adults are also still coming in. And if the adult "family" customer slackens off because of unemployment and the tightening dollar, Rosen feels that the major youth market will still buy records, tapes, hi-fi sets, and now car stereos in increasing numbers.
While quad hasn't meant much to
WeeThree this past year--nor was much expected of it, Rosen feels that quad concepts rather than quad units will be a sales factor in 1975.
He looks forward to appreciable sales for units that are versatile and can be adapted to quad-particularly units with bridging circuits.
While there is a definite interest in quad among WeeThree customers, and there's no trouble selling everything in stock in quad LPs and tapes.
Rosen feels there's not enough salable hardware on the market today or in the works to make a real sales difference.
Much more significant that quad units are car stereos. With all WeeThree shops located in suburban shopping centers, and all customers coming in cars, 8-track underdash units sell good and promise to continue to do so in the months ahead.
WORTHINGTON, Ohio
Gold Circle Discount Department
Stores, with 23 outlets in Columbus, Cleveland, Cincinnati, Akron, Canton and Dayton, finds 1974 sales “on plan, but nothing more," according to Gene White, electronics buyer.
Records had fairly strong increases for the first half of the year and declined after the price increase.
White says. "Dollar sales maintained a pace with last year, but unit sales were 15-18 percent lower. Sales are very tough to come by now," the electronics buyer notes.
"Brown goods have dropped 15 to 20 percent behind, particularly compacts and component packages,
'Play-record' is very slow. We're pushing low-end items, such as clock radios and personal radios. Even though that is the strength of our business, we look for a very tough fall season. Figures bear me out in price points above $100. For ex-ample, after a two-day ad on a $139 package, we usually sell 15 units per store in November and 35 to 40 per store in December. But we're selling very little in component packages,"
White reports.
Gold Circle's total 1974 sales are expected to equal last year's sales per store because of a 15 percent increase in the first half. Smaller-ticket items maintained a fairly respectable pace, with adults still spending money on kids for Christmas, but not buying electronics for themselves.
"Next year," White says, "promotions will be geared to small-ticket items right on through the first six months. We're doing some fairly aggressive advertising on 10 to 12 key items every other week and using radio spots. I see an upturn in April.
There'll be an awful lot of ‘dumps' in the first quarter. People with flexible inventory can take advantage of them.
"But the grocery bill is getting so high, that the trend right now is reluctance to spend dollars on hi-fi equipment," Gold Circle's electronics man concludes.
COLUMBUS, Ohio
"Fewer people are buying and they're buying less expensive items, Ed Hirsch, general manager of Sun TV & Appliances' seven outlets, comments on 1974 electronics sales compared with 1973. "I'd say we're down about 8 to 10 percent unit-wise," he ventures.
“Moderate priced items are holding well, but quad never developed as it was supposed to do. And expensive console stereos were very, very slow.
Hirsch thinks the first six to eight months of 1975 will be very rough.
"People will buy NEEDS," he stresses. "They'll buy entertainment items as well, because they won't be able to afford to go out. So they'll want stereo for home entertainment, but it will be moderate-priced stuff.
We'll be pushing low and medium-priced merchandise." Sun TV plans for 1975 include an increased advertising budget, Hirsch says. The firm handles no software.
***
Software at Buzzard's Nest
Records' three stores was up about 35 percent this year, according to Wally Buzz, president. "Records started declining in July, but overall are holding their own. Eight-track prerecorded tape was really strong.
And cassettes are down," he summarizes.
Despite a substantial increase, he says, "I've been in the business since 1962 and it should be a lot better than it is right now. And it's not because of the economy. I blame the distributor. Who wants to spend $11.98 for a double record set? They should be priced at $9.98 or even $7.98, but they're trying to get that extra buck. Columbia's doing a good job with its $4.98's and $5.98's.
"For 1975, I say let's have fewer releases and let people get caught up on some old things. So much new stuff has come out in the last six months that people have forgotten about early James Taylor and Carly Simon." Buzz opines.
CINCINNATI
Unit sales are running about 25 percent over last year at three Swallen's outlets handling stereo and software, "Already in the first 11 months of 1974, we surpassed all of last year and we figure one-fourth of our business comes in December.
And this doesn't include the new outlet we added in Columbus this year, which also handles audio. Dollarwise, we're 20-25 percent ahead of last year," stereo buyer Gene Brunner reports.
"Manual turntables and speakers did the best in sales, with quad the biggest disappointment. We've always been big advocates of quad and we're still doing business in it but not like we expected." he continues.
"In software, 8-track tape sales were good. Record sales were also good- 10 to 15 percent ahead of last year dollarwise, but 25 percent of software business this vear has been in 8-track prerecorded tapes. I don't see much growth for records in 1975–maybe 15 percent at the most, unless quad output increases, which I don't see happening at this moment.” Brunner opines.
Swallen's 1975 software plans are to cut back the number of blank tape brands carried from six to four in 8-track, cassette and open reel.
Brunner says increased promotional efforts will be stressed in 1975.
"We're committed to more advertising. There's a tighter fight for the dollar. We've already done 10 to 20 percent more advertising and we'll continue this in areas which bring results.
"We'll still advertise quad but not spend as much in this area because sales don't warrant the investment.
So we'll stress basic items--systems and separate components, low-end compacts and modules. We'll gear to lower-priced tickets-as low as $100," he explains.
Swallen's goal in 1975 will be to work "closer" and turn inventory faster, Brunner reveals. "We'll not buy as many big special purchases.
We'll buy oftener and in smaller quantities and strive for more cash flow by not keeping so much money tied up in inventory.
INDIANAPOLIS
Not only are customers buying less expensive equipment these days, but an increasing number are doing their own repair work. That's the report from Don Limbach, manager of one of Olson Electronics' outlets here.
"More people are getting parts and fixing their own equipment, Limbach says. "Repair shops are pricing themselves out of business.” In keeping with this economizing, customers are bypassing expensive systems and selecting compact systems for $200-$300, complete.
Customer traffic and volume remained steady over last year, Lim-bach says, but people spent less.
Christmas sales were down a little bit, as of less than three weeks before the holidays.
Car stereos-in-dash at around $130-were the store's best selling items, topping home units, Limbach notes. Cassette tape recorder sales picked up, though 8-track is still more popular. The average price range for recorders was between $129 and $179.
***
While other stores remain wary of quad, Lafayette emphasizes it. At the Georgetown store (oldest and largest volume seller of the four area outlets) quad accounts for about 50 percent of sales.
Quad volume at Lafayette has remained fairly constant over 1973, despite a lack of support from the rest of the industry, store manager Bill Clarke says. Quad prices start at around $100 and go on up. A point is made to educate people about 4-channel and as word gets out about that, prospective customers will come in to hear it for the first time, he adds.
In these difficult economic times. customers are buying less at the high end. Instead of going for the $800 system, they're looking more at the $300-$400 range, Clarke says. And becoming choosier, too. "Customers try to get the best deal they can," Clarke says. "They don't want to buy equipment where they buy appliances."
Dollar volume has stayed about the same, but customer traffic has decreased somewhat since 1973, Clarke notes, more turntables, at about $120, are selling now, as people seek to upgrade present systems. Car stereos, normally a spring item, have had sales more spread out this year, with in-dash 8-track leading the way.
BLOOMINGTON, Ind.
Sales are up 20 percent at Alan Audio, due to the fact, owner Don Rhoads says, that the middle and high end lines are holding up better than the low end.
"People are buying carefully, looking for top quality and long term wear." he says. The marginal customer, who would buy low end, is worried about getting the money to eat, Rhoads said, while economic conditions haven't much affected the high end buyer.
Complete systems still represent about half of Alan's volume. College town business tends to be erratic. At the beginning of a semester, $300-$400 systems are popular. Fewer, but more expensive systems ($600-$800) are sold during the semester.
In turntable business, "this was the year of the manual," Roads says, in the price range of $100-$175.
Speakers sold best at $50-$150; receivers in either the $200-$240 or the $400-$500 category.
Alan got into quad and "we're getting out as fast as we can," he notes.
“Quad is still in an uproar and there'll be no more quad receivers here for awhile."
Roads concedes that there is a place for quad at the very expensive end. He says one customer has begged for an $850 pre-amp. "There aren't many customers at this end, but they do want to spend money." Alan is in a period of refining lines and equipment. Portable cassette recorders have been dropped, reel-to-reel tape recorders deemphasized and the number of high end speakers decreased. Some lines have been cut.
April and November were poor selling months, but December
"started off with a bang" and January sales, with post-Christmas servicing and the start of a new semester
"should be gangbusters." Rhoads, however, doesn't predict setting any sales records for 1975.
For the past four or five months, Alan has been spending money for test equipment like "drunken sailors." Rhoads termed it a necessary investment that will prove profitable in the future.
MINNEAPOLIS
The upcoming year will be difficult—more intense marketing and merchandising efforts will be required—but it will be a year of prog-ress, says Dick Schulze, president of Sound of Music Stores headquartered here.
The company's fiscal year ended in August with a 52 percent increase in sales and a 71 percent incrèase in earnings. Early reports on the year now in progress show a 40 percent boost in sales and 27 percent gain in earnings. "There are positive indicators in this September and October performance report," Schulze says,
"but we have observed periodic softening in traffic patterns and in customers' willingness to buy."
Mid to high price brackets are showing the strongest growth; low-price areas are definitely softer than last year. This indicates to Schulze that, while first-time buyers may be reluctant to invest heavily in equip-ment, those who are upgrading their components, are willing to spend the money.
Sound of Music sells top-end mer-chandise. "Our car stereo units (cassettes) are in the $150 and $200 range; we aren't in the jungle of 8-track. Our lowest price component is $249. And this year we are in video for the first time, with Advent's Videobeam large-screen color TV, an exciting new product."
As an example of Sound of Music's kind of creative merchandising, when the new Orchestra Hall here opened in October, the event was a complete sellout and there were many disappointed would-be pa-trons. In cooperation with a local FM public service classical radio station and a TV station, Sound of Music provided the audio and video equipment so that an orchestra audience could be assembled in another hall (in St. Paul) to hear and see the performance.
"They came in evening dress, with bottles of champagne, and gave the orchestra a standing ovation at the conclusion of the performance," Schulze recalls. "It was a great evening!"
Sound of Music had put duplicate screens at each end of the hall so the audience was divided in half, sat back to back to watch. In actuality, they had none of the "sightline" problems which some concert-goers encountered in the upper tiers of the new Orchestra Hall.
KANSAS CITY, Mo.
At Volume TV, a major four-store TV-stereo outlet headquartered here, Ed Gieseler, owner, sees sales in 1975 zipping well beyond the 1974 records. An exclusive Zenith dealership, the firm turns in a solid performance on both home stereo and color TV in this brand.
And one reason for the rosy predictions is the fact that Zenith is constantly getting more thrust and image in this market for its "Allegro" name with its tremendous national advertising power.
Also, says this owner, who started the business nine years ago, and has stores in Independence, and North Kansas City on the Missouri side and Overland Park and Wyandotte County on the Kansas side, the departure of a number of independent stereo-TV dealers from the area in the past year spells more business for the remaining dealers. "The competition has definitely narrowed and those of us who have survived the down economy, strikes, inflation and other deterring factors should grow stronger.
"But," he says, pointedly.
"people in this market are still buying X-numbers of TV and stereo units.
Quad sales have been disappointing, chiefly because of the sad software availability situation." The 8-track recording feature in hi fi compacts hasn't been much of a factor, he notes, "mainly because it's a feature most commonly found in units priced in the $400 neighborhood.
And the big volume of our compact sales are in outfits priced under $200 which are not equipped with this feature."
TOPEKA, Kan.
"Substantially better," is the way Jim Nelson, Manager of Team Electronics here looks at 1975. Sales in 1974? “Phenomenal in almost everything." he declares.
Among brisk-selling categories were add-on or replacement automotive stereo speakers. This was step-up selling and the $30 to $60 per pair speakers got the business.
The fact that Team has the largest selection of car speakers in town—over 500 different combinations to show and demonstrate in a galaxy of brand names—was a big factor in sales.
The big void that needs filling for this store? A good-quality, low priced line of headphones that can be priced at $9.95. "People are crying for them,” says Nelson. "We had headphones priced at $9.95 but the difficulty was they looked their price. We sorely need a line we could price at $9.95 and looked like $19.95 phones. Why the big need for promotional-priced headphones?
They're a first-rate item to sell up from to something else,” says this manager.
The big surge here Nelson says he's anticipating is for Dolby FM business. This capitol city now has a Dolby FM radio station and this development he believes will have sharp impact.
For 1975, he sees continued demand for heavier-magnet car stereo speakers. He believes automotive stereo sales, particularly in in-dash units, will climb dramatically and he believes blank tape sales will "keep on truckin.’”
MEMPHIS
Records/tapes sold better in this area in 1974 than in 1973 and dealers predict the coming year will be even better. Sales of record/play-back equipment also moved upward in 1974, and the feeling for the coming year is "hopeful, although as the manager of one large hi fi outlet says, "Who knows in today's economy?"
In this city, only department stores and discount chains handle both records/tapes and hi-fi equipment, and most departments are separate.
Mrs. Gladys Taylor of Zayre Department Store says record/tape sales in 1974 were “up quite a bit in both unit volume and dollar sale.
Records seem to be selling if nothing else does. We have moved ours up to the front of the store and that seems to have helped. I feel business in 1975 will be just as good, if not bet-ter,” Ray Jacques, manager of appliances for K-Mart, notes, "Stereo items are doing well and for us next year should be better. We didn't open here until this year."
A top disk outlet. Poplar Tunes and Pop Tunes, reports unit and dotlar volume both up in the past year, but "can't tell about the coming year in view of the economy, but it doesn't seem to be affecting this business as much as some others. We have few complaints even about the price increases. It seems that in economically-troubled times, everything heads toward entertainment.
I'm guessing 1975 will show as much of an increase as ‘74 had over ‘73.”
A leading hi fi sales group of stores notes “a downward trend in the economy, and we haven't had our usual gain in 1974. From a gross standpoint, the past year was not as good as 1973. Fastest moving equipment has been citizen band radios, and all stereo equipment is still selling well. Major thing happening and most important is that merchandise instead of going up in price is getting better for the same price ... they are finding ways to make better equipment for the same cost. Systems that we sold for $400 last year can be matched now for $100 less.”
***
In the Memphis trade area, White Dog Records at Jonesboro, Ark., which does handle both records/ tapes and hi fi equipment, reports “business up in 1974 about 50 per cent over the previous year, mainly due to an expanding market. CB radios did especially well. One thing that bombed is certain records.
"For the coming year," manager
Van Spence says, "I think we must resign ourselves to slow business until the middle of the year and then, I think, we will see an upward swing. I think cassettes, especially the better quality, will pick up next year, both car and home units.
ST. LOUIS
After end of August, sales for the five Hi-Fi Fo-Fum, Inc., outlets in St.
Louis, Milwaukee and Kansas City totaled the same as for all of 1973.
But the year's last quarter had slowed down, reported Jim Tipton, the firm's market manager for the two Milwaukee stores.
However, the two St. Louis stores continue to be strong in all sales, with the new Kansas City facility, which opened in May, coming along well.
"We're looking for better things here," Tipton says, referring to Milwaukee. "But with the economy the way it is, it will depend a lot on the people. Right now, they come and get a little less than what they wanted. However, they are more knowledgeable about the equipment and are prepared to return when the economics even out."
Top selling brands in all of Hi-Fi Fo-Fum stores include Dual turntables, Kenwood and KLH receivers. Koss headphones, and Advent, KLH and Mcintosh speakers. "We don't offer any house brands but try to get the best value equipment,” Tipton stresses.
He says that quad sales had dropped considerably in 1974, due partly to the higher cost, but the firm is expecting to do better in the future. "There is some interest, but most people still like the sound of their steereo units and the guarantee.
They're waiting, for the technology to catch up."
The firm hasn't been pushing 8-track, Tipton says. "It's not up to the standards of cassette or reel to reel. In fact, the cassette machine has come into its own. For instance, the Advent 201 cassette, selling at $300, does as good a job as a more expensive reel."
The company has a cross section of customers, from the young singles to the older homeowner who wants a customized unit. Both Milwaukee and St. Louis outlets have a cabinetmaker on the payroll who can do those specialized house jobs—a good business booster, Tipton reports. Hi-Fi Fo-Fum also does many custom installations for area clubs and lounges, with owners making referrals.
As far as the yearend and holiday sales have gone, Tipton says that business picked up as expected and the company's hoping for another good year.
MILWAUKEE
Across-the-board stereo and recording equipment dollar volume for The Boston Store, one of the area's prestige department stores, was down about 10 per cent in 1974, according to Gerald Appelbaum, merchandise manager for stereo and TV.
Unit sales were also down for the store, with facilities in downtown, four shopping centers and another store on the city's northwest side.
While there was good spring business, midsummer and autumn sales flattened off, Appelbaum says, citing the dip in the economy as a possible factor.
"We also expect the trend to continue through 1975," he notes.
"We'll probably be affected like other stores selling ‘luxury items.’ “
The firm handles Magnavox components exclusively, "therefore our business is narrowed to the people interested in this line. We're strong in the console stereo systems and get a cross-section of customers, but mostly families and older persons," Appelbaum says. He mentions that more people were sophisticated in their knowledge of systems, "asking more than just how many watts there were in a unit."
Appelbaum says that store visitors are actively pricing and comparing, but cautious with spending.
Quad sales were slow for Boston Store, with the cost and complexity cited as factors. "Maybe when the economy straightens out and technology and understanding of these units improves, the price will reflect it," he notes.
An annual mid-January to mid-February sale by Magnavox was a good business booster last year and Appelbaum hopes the 1975 sale will be strong.
"Lower priced components seem to be doing better all the way around. We'll follow what the consumer is seeking,” Applebaum said.
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The four Team Electronics outlets here report good 1974 business and optimism for '75. Two are company owned and two are franchised.
“Sales are holding pretty close to
those of a year ago," reports Roger Eckmann, owner of the Team northwest facility. "People are generally thinking before buying; there have been ups and downs. They have a pretty basic idea on what they're looking for," he says; adding that more and more persons were becoming interested in manual-operated turntables.
Big system sales were up (including quad) 10 to 15 percent for Jim Nawrocki, manager of the Team Southgate store. He says that car tape units were up 15 to 20 percent.
"I don't really know about next year but I'm optimistic. Our industry doesn't suffer like some others. Our customers are primarily the 18-to-35-year-old males who would live in a grass hut and have a $1,000 stereo system," he said.
The store's window displays, which look into a quad showroom, are big business boosters. He also reports an increase in the sale of cassette recording devices, citing the technological advances.
As a "sideline," the store has one rock record rack that adds about $20,000 a year to the firm "which is just gravy," Nawrocki says.
"We've been busy as hell to tell the truth," says Joel Bitterman, manager of the Team Northridge outlet.
He notes an increase of knowedgeable women customers and expects a greater number of repeaters to his store in the third year of operation. "Once people get settled in with a committed sales staff and get a good deal, they'll be back," he says.
Bitterman also expects an expansion in the 4-channel business and more of a move toward cassettes.
His store draws customers from other cities in Wisconsin and even as far away as southern Illinois. "Team is a security factor. We can refer customers to our other stores just about anywhere; consumers are well aware of that and they want the coverage." Dale Lewis of the Team Southridge outlet also reports fine ‘74 business, saying that the holiday season was very busy.
PORTLAND
The sales dollar volume for LPs is running two to one over tapes at Al's Records, with two stores here. Tape sales are accelerating, however, says owner Al Vanover, who has enjoyed a 20 to 25 percent increase in overall unit turnover and dollar volume in the past year.
Pop music is the big seller at both stores, although he tries to carry a representative selection to please variant tastes. Last year was marked by a hefty upsurge in demand for the rock 'n’ roll "oldies" music of the 40's and 50's and the trend is continuing. The 20-35 age group constitutes a major part of his 15-year clientele, with the teen-age market steady but not large. He does very little business in classical, jazz or soul music.
Quad sales, Vanover notes, are picking up and he sees a profitable future in this line. The industry at long last, he feels, is attempting to make more software available. For a long time it was difficult to find new quad releases but the manufacturers, he believes, have made a determined effort to correct this situation, especially in the past six months.
Vanover is hesitant about predicting future stability in the LP and tape market, but nothing currently indicates a slackening of volume growth. "Along with everyone else in the industry I'm hoping for a continued acceleration both in profits and in unit sales." Any new developments by manufacturers that "take" with the consumer, he says, will have a salutary effect on the retailer and his business future.
LINCOLN, Neb.
"We're optimistic about the coming sales year," says Bob Pavlik, manager of Stereo Studio. "We're already well over last year's figures, and business is always improving." Stereo Studio has three stores; two here, one in Omaha. "Our Lincoln stores are doing very well so far this year," continues Pavlik. "The outlet in Omaha is a little bit behind and is only going fair, but it's coming into its own now." Pavlik estimates that sales volume here is up 25-30 percent over last year.
Like many other dealers, he has found that quad stereo systems and equipment have done very poorly:
"Quad is absolutely nothing in terms of sales—at its best selling point, it didn't make up 5 percent of our sales.”
Pavlik claims that his best-moving items have been Advent speakers, Dual and BSR turntables, and Marantz receivers. "One of our extremely popular and relatively new lines is Yamaha, particularly the speakers," he adds. "We just began selling them this year, and it has gone very, very well.
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“Our year, so far, has been very
good—extremely good,” says Dan Geiger, manager of Team Electronics. "We're about halfway through our sales year, and already we're $52,000 ahead of sales for last year, when we grossed about $700,000.
Team has also had troubles with quad systems: "Yes, they bombed here,” comments Geiger.
"We haven't sold any for the past two or three months and it looks like we won't be selling any in the next few months either.”
Items that have done well include
8-track tapes, CB radio, hi fi turntables, stereos, tape decks and compacts. Team had a hard time selling open reel tapes, however. "It seemed to balance out, though," adds Geiger. "If one item did badly, another came along to make up for it."
PITTSFIELD, Mass.
Pittsfield Radio has found business down a bit but not enough to worry about, particularly with the economy, according to manager John Kastinakis. Open-reel and cassette sales are apparently being hurt as these are getting to be "dollar items” and people are becoming very careful about spending in this area.
Conversely, the stereo component business has held up, and Kastinakis is generally optimistic about the coming year.
"People are buying
stereo instead of cars," he notes,
"and because of the energy crisis and fuel shortage, they're finding more and more time at home."
***
The local Lafayette Radio outlet also has found the hi fi component market holding up well except for quad, although manager Dave Corbett reports a definite problem in getting a variety of electronic parts.
Overall, sales volume is about the same this year as in 1973, as opposed to solid gains the last several years.
With layoffs at General Electric and other area plants, all business in the area is beginning to feel the pinch. But he noted “it is the young people who control the hi fi and record/ tape market, and I can't tell you where they are still getting all the money.”
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Also disappointed with overall business this year was the local Radio Shack outlet, although dollar volume was ahead of 1973. Manager Richard Alter feels he has a solid share of the hi fi market, although quad has not done as well as expected. Other items in the Radio Shack line generally did well, although they didn't move fast enough to suit him. He looks to a definite rise in business in 1975, particularly for stereo.
