Talkin' about a revolution in music sales: superstores and CE chains record gains, while small stores are scratched off consumers' playlists

Discount Store News, March 18, 1996 by Pete Hisey

Tower is highly promotional. Its standard price for CDs is about $15, but the chain has hundreds of titles promoted at $11.99. Many titles have been promoted, then re-priced, so many times that there are often five or six price tags piled up on a single disc.

WOW! is probably the most attractive store in the industry, but in recent visits, it didn't appear to be drawing the traffic of most of its competitors. Located off the beaten tourist path in Las Vegas, it doesn't receive the boost that other urban stores do from tourist traffic. If relocated to The Strip, WOW! could be a major winner.

Expansion of the concept will probably be slow; with two partners, each with a different business model, sites acceptable to both will probably be few.

Circuit City

While the chain is still using music primarily as a traffic builder, it has expanded its commitment to the category, moving into the neighborhood of 15,000 skus, compared to the 9,000 it formerly carried. The chain has also stabilized its pricing at $12.99, with top hits and new releases sometimes discounted to under $10. However, Circuit seems to have backed away from the wholesale below-cost selections it often promoted during 1995. During an early March visit to a Lakeland, Fla., unit, only a handful of titles were being sold at less than $12.99.

Circuit has added a large selection of budget and cut-out merchandise, presented in dump bins and outpost fixtures, with prices ranging from $2.99 per disc to $8.99 for multidisc budget classical sets. Most cut-outs, however, are sold for $4.99.

Lechmere/Electric Avenue & More

Lechmere, purchased three years ago by Montgomery Ward, is the granddaddy of the music megastores. Its original units merchandised dominant music and hard lines selections as far back as the 1960s, when both businesses were generally conducted by small mom and pop specialty stores. The chain was the first to move aggressively into the computer retail market in the mid-'80s.

Lechmere also merchandises a massive selection of home goods, including cookware, tabletop and small and major appliances. Its 50,000-sq.-ft. footprint set a trend in the industry, one that Best Buy and Incredible Universe have modeled themselves upon.

Its sister company, Electric Avenue & More, is a spin-off of parent Ward's consumer electronics department. Combining large music and video selections, CE, furniture and decorative products, the concept has yet to roll out nationally.