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 14,300 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 $5 million annually.
- The electronics and appliance retail industry consists of 14,300 firms that employ about 440,000 workers and generate about $76 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
May 17, 2023 - Sales Down for Electronics and Appliance Stores
- Sales for electronics and appliance stores dropped over 8% unadjusted year over year and less than 1% month over month seasonally adjusted in April 2023, according to the National Retail Federation. Overall retail sales were up 1.6% in April 2023 over a year ago and 0.4% from March 2023, according to the US Census Bureau. NRF’s retail sales calculation, which excludes car dealers, gas stations, and restaurants, showed an increase of 2% unadjusted year over year and up 0.6% month over month in April 2023. According to NRF President and CEO Matthew Shay, “Retail sales rebounded in April, reflecting consumer resilience in the face of elevated economic uncertainty. Moderating price levels, continued labor market strength and wage gains have increased consumers’ ability to spend. However, they remain cautious and concerned about the current economic environment. Retailers continue to provide competitive pricing and convenience to help cost-sensitive consumers stretch their budgets.”
- Consumer confidence levels fell in April 2023 after a slight increase in March 2023, according to data from The Conference Board. The Conference Board’s consumer confidence index dipped to 101.3 in April 2023 from 104 in March 2023. According to Ataman Ozyildirim, a senior director of economics at The Conference Board, “Consumers became more pessimistic about the outlook for both business conditions and labor markets. Compared to last month, fewer households expect business conditions to improve and more expect worsening of conditions in the next six months. They also expect fewer jobs to be available over the short term. April’s decline in consumer confidence reflects particular deterioration in expectations for consumers under 55 years of age and for households earning $50,000 and over.” Plans to purchase appliances, autos, homes, and vacations cooled in April 2023, a sign that consumers are pulling back amid reduced optimism, per Ozyildirim.
- More than half of consumers buying large appliances or electronics say shopping in store is more convenient than shopping online, according to a new Numerator report. For shoppers looking for small appliances or electronics, 29% prefer the convenience of in-store shopping, 29% prefer online, and 42% say both methods are equally convenient. The Numerator convenience survey found that 82% of surveyed shoppers say convenience is extremely or very important to them, with millennials at 87%. Most respondents said price and quality are ranked ahead of convenience in terms of importance for a shopping experience. Nearly 80% said the most convenient location is the one closest to home, followed by one along a route traveled regularly (54%). Gen Z respondents, who are 20% more likely to live in an urban setting and 45% less likely to own a vehicle, reported that they prefer having a store within walking distance (25%) and along public transportation (13%).
- The US Department of Energy (DOE) has proposed new energy efficiency standards for refrigerators and clothes washers that are expected to save consumers more than $3 billion annually on energy and water bills, according to Utility Dive. The agency, which has been criticized for not keeping up with appliance standards updates, said the new guidelines would strengthen energy efficiency standards for refrigerators, refrigerator-freezers, clothes washers, and standalone freezers. The standards could come into effect as soon as 2027. The DOE has not updated the rules for refrigerators and clothes washers in more than a decade. According to the DOE, “Households using new refrigerators and clothes washers will save an estimated $425 on their utility bill over the average life of the appliance with these standards in place. Over the next 30 years, the proposed rules are expected to reduce carbon dioxide emissions by 233 million metric tons — an amount roughly equivalent to the combined annual emissions of 29 million homes.” About 5% of annual residential energy use is generated by products covered by the proposed DOE rules.
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