Musical Instrument & Supply 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 2,400 musical instrument and supply retailers in the US sell musical instruments, sheet music, and related products and services. Firms may provide rental, lease, or repair services for musical instruments. Some firms provide music instruction or lessons. Companies may specialize in a particular product category, such as pianos or guitars.

Competition from Alternative Sources

Musical instrument and supply retailers compete with a variety of alternative sources, including mass merchandisers, warehouse clubs, online-only retailers, and direct-to-consumer channels.

Unpredictable Trends and Fads

While not as unpredictable as the fashion industry, the musical instrument and supply market has its share of trends and fads.

Industry size & Structure

The average musical instrument and supply store operates out of a single location, employs 11 workers, and generates $1-2 million annually.

    • The musical instrument and supply store industry consists of about 2,400 firms that employ about 27,700 workers and generate $4.5 billion annually.
    • The musical instrument and supply store industry is concentrated at the top and fragmented at the bottom; the top 50 companies account for about 55% of industry revenue. The top four firms account for 41% of industry revenue.
    • Large companies include Guitar Center, Sam Ash, and Schmitt Music Company. Some large domestic firms will ship merchandise to foreign countries.
                                    Industry Forecast
                                    Musical Instrument & Supply Stores Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Mar 4, 2024 - Higher Labor Costs, Lower Employment Levels
                                    • According to data from the Bureau of Labor Statistics (BLS), employment levels for musical instrument and supplies retailers were mostly flat in December 2023 compared to the previous year. However, the levels have declined by 7% since before the pandemic. At the same time, employment costs for the sporting goods, hobby, musical instrument, book, and miscellaneous retailer category have risen significantly due to a tight labor market, with wages increasing by nearly 5% in December 2023 from the previous year and by 30% since December 2019, according to the BLS. Hourly wages rose to $20 in the fourth quarter of 2023. Meanwhile, consumer spending levels grew in the last half of 2023, a 3.1% increase in the third quarter and 2.8% in the fourth quarter, according to Reuters.
                                    • Consumer confidence levels fell in February 2024 after increasing for three consecutive months, according to data from The Conference Board. The Conference Board’s consumer confidence index fell to 106.7 in February 2024 from 110.9 in January 2024. According to Dana Peterson, Chief Economist at The Conference Board, “The decline in consumer confidence in February interrupted a three-month rise, reflecting persistent uncertainty about the US economy. The drop in confidence was broad-based, affecting all income groups except households earning less than $15,000 and those earning more than $125,000.” Peterson added that the decline in consumer confidence was largest in householders over 55 and those under 35. Plans to purchase homes, autos, and large appliances decreased slightly on a six-month basis.
                                    • A new report from the National Retail Federation and Appriss Retail shows returns for the retail industry reached $743 billion in merchandise in 2023, according to Chain Store Age. The rate in 2023 was 14.5%, lower than the 16.5% in 2022 and 16.6% in 2021. The average retailer faces $145 million in merchandise returns for every $1 billion in sales. Online sales have a higher return rate; 17.6% of merchandise purchased online is returned compared to 10% for pure brick-and-mortar returns. Over 15% of holiday gifts are expected to be returned, totaling some $148 billion. Fraudulent returns account for 16.5% of total holiday returns. Types of return fraud in 2023 included returns of used, non-defective merchandise (49%), the return of shoplifted or stolen goods (44%), returns of goods purchased on fraudulent or stolen tender (37%), and return fraud from organized retail crime organizations (20%).
                                    • More consumers would prefer free shipping over same-day delivery, according to a new Forrester report shared by Retail Dive. About 75% of US online consumers say that free shipping is among the most critical criteria they consider when deciding where to shop online, while only 20% selected next-day or same-day delivery as a key factor. Retailers such as Amazon, Target, and Walmart have invested in same-day and next-day delivery capabilities as a competitive differentiator to speed up delivery times for consumers. Nearly 50% of consumers surveyed by Forrester said the option for same-day delivery has little impact on which retailer or brand they will buy. The average delivery time cited in the article between placing and receiving an order was four days as of April 2023. Consumers have expressed interest in buying online and picking up at a nearby store (22%), curbside pickup (27%), and drive-through pickup options (15%).
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