 When will the economic carnage end? It’s a question we’ve certainly all asked. The pain lingers day after day. And although you’ve probably read in the pages of this magazine that our industry has held up better than others, it’s a relative statement. MI has performed much better than the financial and insurance industries, but is that saying much? Probably not.
Like everything else, guitar sales did decline in 2008 compared to 2007. The guitar is a tough instrument though. It can take a good beating, both figuratively and literally. But the beating wasn’t bad at all compared to the general economy. Sales declined 10 percent last year, which is certainly a significant figure. However, although times are nowhere near perfect, guitars continue to show plenty of resolve, said Jim Hirschberg of MI Sales Trak, a top industry research authority. “Guitar sales were rolling along nicely until the economic crisis put a damper on business starting last September. From September ’08 through January ’09, unit sales of guitars fell 10.4 percent vs. the same period a year ago. The decline in unit sales isn’t too bad, given the current economy, but dollar sales have fallen 15 percent during the same time period. Average selling prices have dropped for several reasons. Consumers have been buying lower in the product line than they might have in better economic times. Discounting seems deeper at all price levels. And the product mix has shifted several percentage points from electric guitars to traditional, lower-priced acoustics. It’s a cost-conscious, no frills market lately.”
Average selling prices for electric guitars dropped from $457 in January 2008 to $450 in January 2009. Acoustic/electric guitar average sale prices showed a much more dramatic decrease from $511 to $474 from January 2008 to January 2009. And acoustic guitar average sales prices dropped as well, from $228 to $209 during the same time periods.
The shift to acoustic guitars is evidenced in the accompanied graph, which shows that in one year, from January 2008 to January 2009, the percentage of acoustic guitar sales rose dramatically. Of the more than 500 retailers MI Sales Trak monitors, acoustic guitar sales comprised 34.5 percent of total guitar sales. That figure rose to 37.4 percent in January 2009. Electric guitar sales dipped from 49.7 percent of all guitar sales in January 2008 to 44.4 percent in January 2009.
According to Hirschberg, the color black continues to be “where it’s at” regarding guitars. As you can see in the attached graph, sales of black electric guitars continue to outpace all other colors. “Black has been the most popular electric guitar color for years. Black has become even more popular in the past few months, perhaps a reflection of somber consumer sentiment.”
Focus on the Future
With an economy perhaps at its weakest point since the Great Depression, there’s no way to predict future guitar sales. History has shown MI will probably perform better than several other industries, but if unemployment hits a double-digit figure, as some have predicted would happen by the end of 2009, all bets could be off.
On the contrary, if the huge economic stimulus the Obama Administration has put forth begins to work, things could get better soon. Nobody, from the “Oracle of Omaha” Warren Buffett, to Goldman Sachs prognosticator Abby Joseph Cohen, to Federal Reserve Chairman Ben Bernanke knows what will happen.
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