Electronics and Appliance Stores
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 13,600 electronics and appliances retailers in the US sell electronics, appliances, and related products and services. Major revenue categories include computer products; TVs and other video equipment; household appliances; telephones (including cell phones); audio equipment; and photographic equipment and supplies. Firms may provide or sell warranty, repair, delivery, or installation services. The industry includes national and regional chains and independent operators.
Rapid Changes in Technology
Advances in technology have created an ever-evolving marketplace for consumer electronics.
Competition from Alternative Sources
Electronics and appliance retailers compete with a variety of alternative sources, including warehouse clubs, department stores, home improvement stores, mass merchandisers, manufacturers, and online-only retailers.
Industry size & Structure
The average electronics and appliance store operates out of a single location, employs about 20 workers, and generates $6-7 million annually.
- The electronics and appliance retail industry consists of 13,600 firms that employ about 416,000 workers and generate about $93 billion annually.
- Household appliance stores account for 24% of industry revenue and 30% of stores. Electronics stores account for 76% of industry revenue and 70% of stores.
- The industry is concentrated; the top 50 companies account for 72% of industry revenue.
- The industry includes national and regional chains and independent operators.
- Large companies include Best Buy and Pirch. Some large firms have international operations.
Industry Forecast
Electronics and Appliance Stores Industry Growth
Recent Developments
Jul 18, 2024 - Inflation Mixed, Employment Falls
- Producer inflation for electronics and appliance retailers increased at the beginning of 2024 before falling in late spring, according to producer price data released by the US Bureau of Labor Statistics (BLS). Employment by electronics and appliance retailers fell during the first five months of 2024 while average wages for nonsupervisory employees stayed fairly stable during the period.
- New data from Circana shows that there has been growth in the ultra-large TVs category, even as overall TV sales have remained stagnant. Deep discounts that started in the second half of 2023 have driven sales. Sales of ultra-large TVs 75 inches and higher grew by 21% year over year in Q1 2024. Revenue, however, has only increased 4% due to the ongoing markdowns. Consumers continue to seek out large screens, with the average screen size climbing 2% (0.8 inches) in the first four months of 2024. While overall TV demand has been stalled due to consumer price sensitivity, the industry is seeing a shorter TV replacement cycle of five to six years, per Circana.
- Electronics and appliance store sales were up 2.1% seasonally adjusted month over month in April 2024, according to the CNBC/NRF Retail Monitor released by the National Retail Federation. The category was down 1.5% unadjusted year over year. Total retail sales, excluding automobiles and gasoline, were down 0.6% unadjusted year over year in April 2024 and up 0.2 % seasonally adjusted month over month. Five out of nine retail categories were higher in April compared to a year ago, led by online sales, health and personal care stores, and building and gardening supply stores. According to NRF President and CEO Matthew Shay, “Consumer spending continues to drive economic growth and retail sales increases, though we see some moderation in spending as consumers continually search for value.” The CNBC/NRF Retail Monitor uses actual, anonymized credit and debit card purchase data compiled by Affinity Solutions.
- A new UBS report in Retail Dive forecasts that 45,000 retail stores may close in upcoming years as online sales gain share. Online retail penetration is expected to rise to 26% from 21%, with retail sales growth of 4% by 2028, as the industry focuses more on fulfillment and distribution centers. If the closures occur, USB said the total number of stores in the US will fall from 958,533 to 913,500. Other factors driving store closures include a tighter lending environment, higher operational costs, and consumers spending more on services than goods. The report stated that sporting goods, clothing, consumer electronics, home furnishings, hobby, book, and music stores have closed the most locations since the first quarter of 2019. Still, retailers can incorporate existing stores as an important piece of their omnichannel capabilities. Per the report, “Our analysis assumes that stores remain an important part of the overall retail ecosystem for retailers and consumers. In the simplest terms, stores serve as hubs of fulfillment and support distribution logistics. This is increasingly more important as consumers are becoming more demanding for convenience or immediate deliveries.”
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