Electronics Retailing Slow in July
RadioShack, one of the biggest national electronics retailers, reported total sales of $320.3 million in July, a 5% drop from the previous month. Sales at comparable stores decreased by 6% in the same period. The biggest loser for the Shack was the personal computer category, which declined by 40%. The PC category is expected to regain momentum during the back-to-school season.
The Fort Worth, TX–based retailer also reported a 20% drop in sales of the DirecTV satellite service, with sales of audio/video gear off approximately 16%. RadioShack will stop releasing monthly sales reports after January 2002, according to an announcement in early August.
San Francisco–based electronics retailer Good Guys also reported slow traffic in July, and on August 8 issued a statement predicting a loss of $4.5 million to $6.5 million in its second quarter ending August 31. The 79-store operation expects a decline of between 6% and 8% in same-store sales during the month of August.
Contradicting a previous report that the company would enjoy a profitable year, Good Guys now expects to post an operating loss of $4-7 million dollars on same-store sales for the fiscal year, but is nonetheless predicting a profitable fourth quarter. The two months leading into the winter holiday season are typically the most profitable period for retailers.
Good Guys has also announced plans to resume store openings in the autumn of 2002, with eight new stores scheduled. During a prolonged restructuring, Good Guys had halted all expansion, but now sees a promising horizon, with predicted profits of $10 million to $20 million for fiscal 2003.
Denver's Ultimate Electronics was a bright spot in the sales picture for July, reporting a 15% gain to a $117.5 million total. That figure was skewed by the opening of several new stores; Ultimate's comparable store sales were actually down 5% for the quarter. The company attributed the slowdown to decreased demand for home audio products, computers, and automotive products. Like many other retailers, Ultimate is still finding sales growth in DVD and other digital video products, including camcorders and big-screen televisions.