Tough Spring; Not Just for 12 Volt

Car audio specialists, if you are feeling a pinch this year, you can blame some of the pain on the economy.  

Retail sales overall took a hit in March as consumers returned to ‘savings mode,’ and one analyst Tuesday said we’re seeing signs of a “spring slowdown.”  It’s not just car audio that is getting squeezed.

In January, the 2 percent payroll tax holiday ended leaving households with less cash.  And in some states, like California, sales and income taxes rose as well. 

Gas prices, while down  for this time of year, were still high enough to represent 11 percent of all retail sales in March, which is more than sales of electronics, clothing, furniture, sporting goods and hobbyist good combined, according to the U.S. Census Bureau.  Gas is pulling a lot of money out of the economy, which takes a toll on overall spending.

For electronics, or “general merchandise and electronics and appliance stores,”  sales declined in March by close to 2 percent compared to February, said the Census.

Kenwood’s Keith Lehmann said car audio has been feeling the effects of the economy since February.

“We know that since the tax hikes have taken effect it has taken a bite out of our sell through,” he said, noting  that people are now spending less on non-essential items.  “And when they are making purchases, they are waiting for sales.”  Step up sales are more difficult lately, Lehmann added.

An MSNBC analyst Tuesday, said we are seeing signs of a “spring slowdown.” This is indicated by new claims for unemployment, which rose in March after months of decline.

Also, total retail sales fell 4 percent in March, marking the largest drop in nine months.

But, that said, there are positive signs for the economy, which could easily turn around this year or even this month.   Car sales are now selling at a rate of about 15 million per year, said Lehmann.  

Source: CEoutlook

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