|Title:||United States music industry aggregate sales in dollars with number of employees and storefronts, market share percentages, and sales per employee and location for the top 200 companies for 2004 to 2010|
Start of full article - but without data
THE TOP XXX AT A GLANCE
Total Sales $X,XXX,XXX,XXX X.XX% $X,XXX,XXX,XXX -X.XX%
Employee Count XX,XXX -X.XX% XX,XXX -X.XX%
Storefronts X,XXX X.XX% X,XXX X.XX%
Market Share XX.XX% X.XX% XX.XX% XX.XX%
Sales Per Employee $XXX,XXX XX.XX% $XXX,XXX X.XX%
Sales Per Location $X,XXX,XXX X.XX% $X,XXX,XXX -XX.XX%
Total Sales $X,XXX,XXX,XXX -X.XX% $X,XXX,XXX,XXX X.XX%
Employee Count XX,XXX -X.XX% XX,XXX -X.XX%
Storefronts XXX -X.XX% XXX -X.XX%
Market Share XX.XX% X.XX% XX.XX% X.XX%
Sales Per Employee $XXX,XXX -X.XX% $XXX,XXX X.XX%
Sales Per Location $X,XXX,XXX -X.XX% $X,XXX,XXX X.XX%
Total Sales $X,XXX,XXX,XXX X.XX% $X,XXX,XXX,XXX X.XX%
Employee Count XX,XXX X.XX% XX,XXX X.XX%
Storefronts XXX -X.XX% X,XXX X.XX%
Market Share XX.XX% X.XX% XX% -X.XX%
Sales Per Employee $XXX,XXX -X.XX% $XXX,XXX -X.XX%
Sales Per Location $X,XXX,XXX X.XX% $X,XXX,XXX X.XX%
Total Sales $X,XXX,XXX,XXX
Employee Count XX,XXX
Market Share XX%
Sales Per Employee $XXX,XXX
Sales Per Location $X,XXX,XXX
Sales results at the industry's largest retailers offered up a "good news/bad news" story in 2010. First, the good news: estimated sales for the group increased X.X% over 2009 levels, the single largest year-over-year gain since 2000. XXX of the Top XXX reported increased sales. The previous year, in the midst of the recession, only XX out of XXX saw top line growth. Now for the bad news: aggregate revenues of the Top XXX are still below levels established in 2007. Last year saw the industry's biggest retailers claw back some of the ground lost after the financial meltdown in 2008. However, they are still grappling with the aftershocks of one of the worst recessions in memory.
With unemployment topping X%, high gasoline and food prices, sinking home values, and an unsettled national mood, it's hardly surprising that consumers are less than eager to spend on discretionary items like most of what our industry sells. It may not provide much comfort to the music products retailers as they confront a more fiscally conservative buying public, but it's worth pointing out that they have plenty of company. Whether it's apparel, autos, consumer electronics, or home furnishings, retail sales in most discretionary categories are lower than pre-recession levels.
Improving market conditions in 2010 left XX% of the Top XXX reasonably confident that sales would continue their upward trajectory in 2011. The remaining XX% projected flat or declining sales. Adding a bit more detail to the outlook of the optimists, XX% anticipated sales gains between X% and X% for the full year 2011; XX% forecast sales gains of X-X%; XX% anticipated gains of between XX% and XX%; and X.X% saw sales advancing by over XX%. Summing up a widely held view, one retailer noted, "We've been battle-hardened by a terrible economy, but we're in a great position to take advantage of even the slightest uptick."
Will this uptick materialize in the near future, or are the optimists guilty of wishful thinking? We suspend judgment, given the murkiness of current economic data. However, it should be noted that the U.S. economy is remarkably resilient and has rebounded from far greater calamities in the past.
The retailers on the Top XXX faced some common chal-lenges--cautious consumers, intensified competition, and difficulties in securing financing. However, these issues took on different forms in each market segment. In the m.i. segment, unit volumes remained strong, and retailers reported fretted instruments and related accessories as the best performing product categories. However, their top line was adversely affected by consumers trading down to lower price points in guitars, drumkits, and audio gear. As one dealer explained, "The former $X,XXX guitar buyer is now buying a $X,XXX instrument. The $X,XXX buyer is now at the $XXX price point, and so on down the line. Everyone has tightened up,"
This move to lower price points has also been accelerated by technology, as consumers increasingly embrace computer-based recording and music production solutions. Instead of spending $X,XXX on recording gear at an m.i. store, consumers buy a $X,XXX laptop at a consumer electronics store, and then outfit it with $X,XXX in software and specialized hardware. Retailers said that this shift has adversely affected sales of higher-priced synthesizers and recording gear.
In the school market, rentals and entry-level instrument sales were at record levels, reflecting a slight increase in enrollment levels and the continued public support for school music. Bid sales of larger instruments to schools and other institutions declined due to tight local and state budgets. Given the low-margins on bid sales, most retailers shrugged off the lost revenue. "Our bid business has been cut in half, but the effect on our bottom line hasn't been all that significant," said one Midwest school music dealer.
The home keyboard industry continues to grapple with fallout from the well-publicized banking industry problems. Billions in government bailouts may have saved the banking system, but it has yet to trickle down to the piano industry. Inventory financing is still hard to secure--and more expensive--as is consumer credit for big-ticket purchases. The net result: Dealers have less access to inventory and consumers have a harder time financing purchases.
All segments of the market were affected one way or another by the continued growth of online sales. We estimate that in 2010 online and catalog sales accounted for about XX% of the Top XXX sales volume. Pinning this number down with greater precision is difficult given the large number of brick-and-mortar retailers who also sell online in one form or another. Over half of the Top XXX sell product on eBay, and close to XX% sell on the Amazon.com site. In addition, XX% report selling product on their own websites. The evolution of this "bricks and clicks" strategy continues, and it's plausible that in five years virtually every member of the Top XXX will make some type of online sales.
In the here and now, dedicated online merchants racked up the strongest growth figures during 2010. Of the XX retailers with the biggest year-over-year sales gains, XX were primarily online operators. These impressive gains can be traced to a combination of consumer convenience (shopping from the comfort of home), broad selection (there's an awful lot of inventory available online), and the absence of sales tax. One online retailer also noted, "The recession forced a lot of brick-and-mortar guys to cut their selection, and consumers are more price sensitive. Both of these factors prompted more people to shop online."
Business people are perpetually fretting over real and perceived competitive threats. A look at what retailers are worrying about offers some insights into how the competitive balance is changing. A decade ago, big box "category killers" were considered the prime market disrupters. As Barnes & Noble, Toys R Us, and Staples rolled out new stores, they appeared to be on track to achieve total market domination. In the music industry, Guitar Center and Sam Ash followed a similar strategy, opening large, well-merchandised stores and terrifying independents. Today, big box stores in the music industry (and elsewhere) no longer seem quite as intimidating. No doubt because the chains have already built stores in most major markets, surviving independents have developed more effective competitive strategies, and financial realities have prompted the big box players to focus more on profits than on sales growth.
In the new decade, internet retailers have replaced the big box as the most pressing competitive concern. In and out of the music industry, online sellers are snatching sales and redefining the competitive balance. The most immediate impact of online sales growth can be seen in the high-profile bankruptcies of former retailer powerhouses like Circuit City and Borders. However, online sales have done more than just snatch sales; they have also forced brick-and-mortar retailers to reassess their strategy.
A key merchandising premise of the big box store was to use a huge selection to create a "wow" effect as consumers walked into the showroom. Now that literally millions of discrete items are available online, it's harder for a well-stocked m.i. store with XX,XXX to XX,XXX SKUs to dazzle a customer. Smart retailers are responding by focusing on the total buying experience. One commented, "My goal is to have constant in-store events to drive traffic and generate some excitement." Another explained, "We're putting all our efforts into improving the skills of our sales staff If you can help people sort through all the available information and help them with a solution, you can compete with the online guys." Anecdotal evidence indicates that more and more retailers are offering some type of lesson program to build traffic. Even Guitar Center has been adding teaching facilities at its newer retail locations.
From one year to the next, changes in the make-up of the Top XXX ranking are nearly imperceptible. A few retailers move up or down a few notches, a handful fall off, either due to shrinking sales or liquidation, and a few new entrants join the ranks. Over the longer term, the change to the list is striking. Consider that no fewer than half of the stores that were on our Top XXX Retailers ranking in 1993 are now out of business. On one level, this upheaval was driven by a combination of management ability (or lack thereof) and changing technologies and retail styles. On a more fundamental level, it can be traced to the consumer's insatiable desire for more: more selection, more features, more service, and lower prices. Ten years from now, we expect a completely different retail ranking, with those capable of satisfying this relentless consumer demand on top.
A few words about the data presented in the following pages are in order. Sales figures, employee counts, and storefront counts are derived from a variety of sources including industry suppliers, state and local government databases, public filings, where available, and informed estimates. The numbers are for the calendar year ended December XX, 2010, or the most recent fiscal year.
All sales figures are estimates for the calendar year 2010, or the most recently completed fiscal year. Tallies of locations and employees correspond to the same time frame as sales estimates. An "N" in the rankings designates a company appearing on the list for the first time. An "R" designates a revised ranking for the prior year, based on newly received information. Sales change percentages represent an increase, unless designated with a"-" sign.
(X.) Guitar Center sales include combined revenues of Music & Arts, Musician's Friend, and Woodwind & Brasswind. (X.) The B&H Photo & Video figure represents an estimate of only the company's music and audio division. (X.) Best Buy estimates represents only sales of the company's "Music Store Within A Store" operation, and not music products that are stocked alongside consumer electronics offerings. (X.) Steinway Hall Retail is a division of the piano maker Steinway & Sons. (X.) Music Go Round sales represent estimated sales of the company's independent franchise operators.
THE TOP XXX AT A GLANCE
Total Sales $X,XXX,XXX,XXX X.XX% $X,XXX,XXX,XXX -X.XX% ...