Outlook for 12V Holiday Sales Part I

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Holiday Sales Car Audio

What should the industry expect in terms of holiday sales this year? And can we get a glimpse of the retail picture into early next year?

In this first of two stories, we’ll tell you what major consumer electronics retailers are predicting.

Then in part II, we’ll explore what many 12 volt specialists and distributors are forecasting for the holidays this year.

Best Buy is preparing for a return to 2019 sales levels and a very ‘promotional’ environment over the holidays.  Also, it believes Christmas may come late this year.

Best Buy CEO Corie Barry told analysts a few weeks ago, “…our hypothesis is you’re going to see a holiday that starts to look a little bit more like what we saw pre-pandemic. Maybe comes a little bit later…”

Already Best Buy is finding that customers are gravitating to lower priced goods in certain categories but not others.  In TVs, the trend is to discount brands.  And consumers are more interested in sales.

Crutchfield sees the economy dipping into full blown recession and is preparing for the worst but hoping for the best. Bill Crutchfield, Founder and CEO of the prominent retailer, believes the Federal Reserve finds itself in a tough position and is likely to raise interest rates to the point the economy dips into recession. He told CEoutlook last month that the recent inflation report (up 8.3 percent in August over last year) bears out his prediction.

 

Bill Crutchfield
Bill Crutchfield, Founder/CEO of Crutchfield Photo credit: TomTom Foundation

Crutchfield conducted an exhaustive study on the economic picture that took into account economic bubbles (housing, bitcoin), labor supply, deglobalization, war in Ukraine, Russian oil embargoes, fewer oil refineries, food shortages (Ukraine produces 30 percent of the world’s wheat and barley), consumer sentiment, interest rates and the recent injection of $6 billion of stimulus into the economy.

He concluded, “We have inflation out of control, bubbles are popping, and the public’s fear of recession is rising.  Then, with rising interest rates along with a slowing economy, we have the foundations for stagflation [persistent inflation combined with low unemployment].”

At the Consumer Technology Association’s CEO Summit this summer, he told industry members “…if we prepare for the worst case and it does not occur, we have lost little.  On the other hand, if we assume that there will be a ‘soft landing’ and it turns out to be an ‘economic hurricane,’ our companies could suffer terribly.  Therefore, our best defense is planning for the worst and hoping for the best-case scenarios. That’s what I have done for the past 48 years in managing Crutchfield.”

He also is looking to remake Crutchfield to suit the new economy. “The marketplace is going to be very different as we emerge from this pandemic and economic downturn.  I am thinking very hard about ways to reinvent Crutchfield to respond to the new world,” he added.

It should be noted that economist predictions are all over the map. A recent Barron’s article noted that much of the economy’s health will depend on the wealthy.

Barron’s noted, the top 20 percent of US households account for almost 40 percent of all consumer spending.  As unemployment is low, many are keeping their jobs and indications are this group will continue to spend heavily past this summer. That could mean the difference between a “soft landing” or a short recession and a longer recession.

Top photo: Crutchfield

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