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INVENTORY DROP BUOYS HOPES OF TRADE: Those clogged TV pipelines were shaken loose
somewhat during November — preliminary estimates placing total between 2,000,000 and 2,100,000 at end of month, as against about 2,350,000 end of Oct. (Vol. 9:45).
Both factory and distributor inventories showed sizable reductions from the 520,000 and 825,000 levels, respectively, at end of Oct. Full report on stocks of dealers isn't in yet — but first returns from key retailers indicate they'll show healthy decline from the 1,000,000 estimate reported last month.
Cutbacks in production, modest business pickup, flurry of retail activity generated by Westinghouse price slash (Vol. 9:46), were credited by trade sources as main reasons for decline in inventory. Planned cutbacks and short Thanksgiving week combined to limit TV output to 103,692 week ended Nov. 27, way down from 146,727 in preceding week and 161,337 first week of month. It brought TV production for RETMA statistical month to about 570,000, and for year to date to about 6,770,000 (with 5 weeks to go) — compared to 6,096,279 for all of 1952.
How much further inventories will decline in December is moot question. In opinion of one highly-placed source, stocks probably won't show much additional drop, sending color-conscious industry into 1954 with about 2,000,000 sets in all pipelines, or about the same as midyear 1953. That's not too high, he opined, considering fact there are 1500 more dealers today than year ago.
Other sources disagree, say Christmas month should bring down inventories, especially if production remains at reduced levels as expected. Time will tell who's right, but as a guide it should be noted that factory inventories increased from 78,200 to 143,800 in Dec. 1950, declined from 287,000 to 216,710 in Dec. 1951, increased from 105,170 to 119,345 last year; distributor inventories increased from 287,900 to 363,500 in Dec. 1950, from 405,469 to 439,340 in 1951, and declined from 468,341 to 404,315 last year. Retail stocks have always declined in December.
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Picture tube price trend is definitely downward. Without fanfare, nearly all tube makers have put into effect price reductions on 21 & 24-in. CR tubes during last 6 weeks. No announcement accompanied actions, but when pressed by newsmen for reasons, companies cited lower costs of glass bulbs, cuts in production cost of aluminized tubes and normal seasonal reductions in orders by set manufacturers.
"Set makers usually stock up on tubes in September and October, then live off their 'fat' in November and December," said one major tube maker. "Iexpect business will pick up again after the first of the year. It usually does."
Price cuts averaged about 7% on selected tubes, few if any manufacturers making across-the-board slashes. All companies agreed oversupply of these tubes was a factor. And as further indication of sluggish movement of large-screen sets, RCA Victor revealed this week it's discontinuing 27-in. output.
Nearly all tube makers are now operating at reduced pace. For example:
RCA Victor has laid off 300 workers at Cincinnati plant. National Video Corp. has
furloughed 300, Rauland and DuMont are producing at about 80% of capacity. Receiving tubes, still in relatively short supply, apparently aren't affected — reflecting continuing good radio output and military procurement.
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Belief that slowness of TV trade is part of national economic letdown is strengthened by release this week of Federal Reserve Board report showing industrial output registered third consecutive monthly decline in Nov. , with consumer durables leading downturn. Board estimated that Nov. output was 228% of prewar base average, compared to 231% in October and 234% in November 1952.
Labor Dept.'s Bureau of Employment Security, in another report, revealed a number of areas among 149 recently surveyed reporting small to moderate declines in
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