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

                                    May 3, 2024 - Sales Decline in March
                                    • Industry sales for sporting goods, hobby, musical instrument, and book stores fell 2.6% in March 2024 from the previous year, according to the latest data from the Census Bureau. On a positive note, sales in the industry were up almost 16% compared to the previous month. According to the Bureau of Labor Statistics (BLS), employment by musical instrument and supplies retailers was flat in March compared to a year ago, while wages at sporting goods, hobby, musical instrument, book, and miscellaneous retailers rose 4.7% to $20.68. In a competitive labor market, wages for the industry have increased by over a third from 2019 to 2024, per the BLS.
                                    • 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.”
                                    • Consumer confidence levels fell in April 2024 from March 2024, marking a third consecutive month of weakness, according to data from The Conference Board. The Conference Board’s consumer confidence index was 97 in April 2024 from 103.1 in March 2024. According to Dana Peterson, Chief Economist at The Conference Board, “Confidence retreated further in April, reaching its lowest level since July 2022 as consumers became less positive about the current labor market situation, and more concerned about future business conditions, job availability, and income.” Peterson added that confidence declined among consumers of all age groups and for all income groups except those in the $25,000 to $49,999 range. Plans for vacations, home purchases, and large appliances decreased 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%).
                                    Get A Demo

                                    Vertical IQ’s Industry Intelligence Platform

                                    See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.

                                    Build valuable, lasting relationships by having smarter conversations -
                                    check out Vertical IQ today.

                                    Request A Demo