Television digest with electronics reports (Jan-Dec 1958)

Trade Report September 13, 1958 ■M—— TV RETAIL SALES CURVE STILL GOING UP: As TV fioes into best selling season, — the 4 months when it ordinarily does about 42% of year's business — retail sales are perking up nicely though still well behind last year. EIA released to us preliminary August retail sales figure of 395,000 sets — 108,000 more than were sold in July — indicating upward, trend of consumer buying extended through 4th month, Month-to-month percentage drop from 1957 also narrowed in Aug. when 23%| lag behind same month last year was a big improvement over earlier months. July was 33% behind same month last year, June 34%, and May, poorest 1958 month with retail sales of 237,000, was 40% behind May of 1957. Rate of TV production actually increased to new peak in week ended Sept, 5, although total output for week was down to 112,992 sets from 134,921 preceding week because of the Labor Day holiday (see below). Higher production rate indicated that retail pickup has been felt all the way back to the source and that pipelines are open to permit easy flow of sets from production lines to retail shelves. Distributor sales for Aug, were 515,000 sets — a better Aug. than usual — boosting dealer stocks 17% from 690,000 sets at end of July to 800,000. This fact was taken by set makers to indicate strong dealer demand for new 1959 lines since dealer inventories customarily drop in Aug. TV sales may hit 5,300,000 this year — vindicating earlier predictions — if present upward curve in sales is maintained through the fall selling season. On the other hand, if historic pattern holds — 42% of business in Sept. -Dec. period — total TV sales will barely top 5,000,000 for the year. Factory Comment Reflects Retail Pickup: Scanning this week's public statements on the business situation by industry topkicks, we came up with some interesting quotes, all quite bullish. Here's v/hat they had to say: Zenith pres. Hugh Robertson, in N.Y. Herald Tribune: "Shipments of Zenith products in Aug. were highest in company's history and 20% above Aug. 1957. The record volume is a continuation of expanding consumer demand that put first half sales and profits 12% and 24% respectively ahead of same 1957 period." Emerson pres. Benjamin Abrams, in Wall Street Journal; "Sales of radio sets have improved over last year. TV sales are going as well as — and in some cases better than — last year. Acquisition of DuMont TV & hi-fi business will add to our last fiscal quarter earnings and increase gross annual sales $25-30,000,000." Philco pres. James M. Skinner reported company will show profit in the third quarter, said it has operated in the black since June, first profitable 1958 month. Gen, sales mgr. Gilbert Freeman, W.J. Lancaster Co., San Francisco Motorola distributor: "If nobody busts the bubble, stereo will be fastest growing industry that we have seen since TV." National Assn, of Purchasing Agents (whose members include most TV-appliance makers) ; "Not since the summer of 1955 have so many [purchasing executives] told of improvements in production and new order figures. This month [Aug.], 45% say that production is up, 40% the same and only 15% worse. Higher new order bookings are reported by 48%, while 41% say there is no change and only 11% have had reductions." Inventory Levels tlood: Factory-distributor TV inventories Sept. 1 were about 1,400,000 sets, retail inventories about 800,000 — both regarded by industry executives as highly satisfactory. Although 2,200,000 total was about 100,000 sets over Aug. 1 figure, it still was 200,000 sets below a year ago. Biggest inventory drop was in distributor stocks. 11