Weekly television digest (Jan-Dec 1963)

NEW SERIES VOL. 3, No. 52 TELEVISION DIGEST-9 In 1964, too, discounters in increasing numbers will continue to look less & less like discounters as they enlist traditional— and cost increasing— merchandising, promotion & selling techniques to stimulate business. There will be increasing use of on-floor selling service, free delivery, credit, mail-&phone ordering service, advertising. Some discounters will introduce new services— store-tocar delivery of purchases, parking lot attendants, tradii^ stamps, expanded-menu snack bars and fullservice restaurants. However, lest TV-radio-appliance dealers take too much solace from these cost-increasing trends, there are others in wind for 1964 to intensify competition from discounters. Three have particular significance for TV retailers. (1) Big shake out which hit discount industry in 1962-63 is now virtually shook out. Out of wreckage have emerged the "pros"astute, experienced, qualified retailers who know what they're doing. These chains tell us 1964 will be year of consolidation & cautious expansion, devoted to tightening operations, beefing sales personnel, sharpening management team. Competition from chains that weathered the shake out figures to be more intensive & effective in 1964. (2) More discount stores in 1964 will introduce repair service or improve present facilities, for TVs and other warranty home instruments & appliances. This move is part of general trend to embellish quality image & emphasize discounters* one -stop -shopping attraction. (3) There will be pronounced trend to smaller cities next year. Prime markets are largely overcrowded now, some have passed saturation point. Discounters, therefore, are now scouting smaller towns. "Next year you'll find discount houses opening in towns you never heard of," one discount executive told us. This trend means that TV retailers in many areas who heretofore only read about discount competition likely will be in thick of fight in next 12 months. Here are other observations culled from our survey of discounters: There's general confidence that 1964' s business tone is sound for discounters. With almost no exceptions, discounters we contacted forecast rising sales in upcoming year. Many expect big jumps, 1 stemming largely from new stores opened this year. There will be markedly fewer new discount stores in 1964. Expansion will proceed cautiously, & some discounters are now more partial to acquisition than to new construction. However, this doesn't mean blackout on new stores. Kresge's K-Mart operation, for example, which opened 35 new discount stores this year for total of 53, plans another 30 in 1964. Korvette has 10 additional stores I blueprinted for next 18 months, for total of 40 by July 1965. Interstate and King's are planning in I terms of 10 new stores each next year. Just about all chains we surveyed plan some new openings i next year, though most will be down from 1963' s expansion rate. Discount attrition will decrease. Shake out, coupled with decline in 1964 expansion plans, has re; suited in tapering off of intra-industry competition which ran riot in discount industry in 1962 and through 1963's first half. Sum -up: TV retailers in 1964 can expect little cheer or gain from discount industry's 1963 attrition. The new discounter image that emerged dvirii^ last half of 1963 is one of tough, shrewd, knowledgeable retailer. Opportunistic discoimters with little experience largely have been driven jfrom field. Survivors, however, although facing problems of rising costs and overcrowded prime markets, are capable & experienced, and they'll continue to give traditional TV retailer a bruisir^ run for consumer dollar. rV-RADIO PRODUCTION: EIA statistics for week ended Dec. 20 (51st week of 1963) excluding 11-in. ind smaller: I Black & white TV. . . ■ Total radio Auto radio Dec. 14-20 Preceding wk. 1962 wk. *63 cumulative '62 cumulative 129, 189 351,315 171,790 136,090 125,405 397,929 380,877 192,206 179,453 6,933,555 18, 145,053 7,938,079 6,414,930 18,959,969 7, 108,486