Circuit City Competition
Now Viewing Circuit City's competition in: Consumer Electronics Stores (primary)
Recent Developments
Parents Spend More On Back-To-School Electronics - Parents were expected to spend nearly $152 on household electronics like computers and cell phones during the 2008 back-to-school season, up from about $129 last year, according to the National Retail Federation. Total consumer electronic spending is expected to reach $5.1 billion, making it the second-largest expenditure after clothing, and the second-biggest selling period for retailers behind the Christmas season. Some 73 percent of parents will buy for back-to-school in discount stores; 21.4 percent plan to shop consumer electronics stores, presenting an opportunity for these retailers to impact sales.
Wal-Mart, Dell Pilot Service Program - Wal-Mart, a major competitor of consumer electronics retailers, is testing a consumer electronics service model with computer manufacturer Dell. The pilot program offers home theater installation, computer repair, wireless support, and other services through "Solution Stations" in more than a dozen Dallas Wal-Mart stores. The retailer doesn't plan to roll out the Dell-managed program beyond the Dallas area.
Sluggish Phones Sales - US consumers are buying fewer cell phones, according to NPD Group, potentially impacting the bottom line of consumer electronic retailers. Mobile phone sales to US consumers totaled 28 million units in second quarter 2008, a 13 percent drop from the same period in 2007. Phones sold were feature-rich and largely Bluetooth and music-enabled. The average selling price per phone hit $84, an increase of 14 percent in second quarter 2008 versus the same period a year ago. Motorola had the largest share of units sold at 21 percent, followed by Samsung and LG, which each had 20 percent. Consumer electronics stores have just 6 percent of the total cell phone market.
Competitive Landscape
Technological innovation and the need to replace or upgrade products drive demand. Profitability for individual companies depends on the ability to generate store traffic and repeat business, and effective merchandising. Large companies can offer wide selections of products and low prices. Small companies can compete effectively by offering specialized products, technological expertise, or superior customer service. Average annual revenue per employee is about $200,000. Competitors include mass merchandisers, warehouse clubs, department stores, Internet and mail order retailers, specialty office and computer retailers, and some manufacturers.
Consumer Electronics Stores Industry Forecast
from Hoover's/D&B subsidiary First Research
US personal consumption expenditures of electronic entertainment, musical instruments, and home computers are forecast to grow at an annual compounded rate of 6.4 percent between 2008 and 2013.
Growth in Consumer Spending of Consumer Electronics Steadies
First Research forecasts are based on INFORUM forecasts that are licensed from the Interindustry Economic Research Fund, Inc. (IERF) in College Park, MD. INFORUM's "interindustry-macro" approach to modeling the economy captures the links between industries and the aggregate economy.
First Research Opportunity Rating
The First Research Opportunity Rating is First Research's estimate of industry performance vs. industry risk over the next 12 to 24 months.
- Demand: New products drive consumer demand
- Large companies have purchasing economies
- Risk: Slow economy limits spending on non-essentials
Industries Where Circuit City Competes
- Retail
- Consumer Electronics & Appliances Retail (primary)
- Camera & Optical Goods Retail
- Computer & Software Retail
- Music, Video, Book & Entertainment Retail
- Nonstore Retail
