Pulse report: Long-term dealer sentiment drops

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Retail trends accelerated in March, with 50 percent of dealers reporting growth versus 28 percent who said they had declines in sales, according to a new survey.

"The overall sales climate appears to be improving compared to the past six months,” wrote one dealer responding to the survey conducted by Baird Research in conjunction with the Marine Retailers Association of the Americas and Trade Only Today.

Another dealer mentioned that boat shows have been working, but "results seem to come 30 to 90 days later,” wrote Baird in the monthly Pulse Report.

Still, dealers are growing more cautious about a potential slowdown, prompting dealer sentiment about current conditions to tick down from 67 to 66, and the 3- to 5-year outlook dropped to 53 from 56 in February.

Those readings are still well above the 53 evaluation on current conditions in January and the long-term outlook rating of 42 in December — each of those marked the most pessimistic outlooks in the more than five-year history of the survey. (In early 2014, the dealer sentiment rating was 54.)

“Dealers should be cautious about their inventories of new boats over the next six months,” said one respondent. “Manufacturer doesn’t want to slow down. Pipeline of ‘new’ boat buyers is soon going to be restricted. Dealers should be cautious of taking too much new inventory. Value buyers, non-new boat buyers are making a comeback since there are again many used boats available. Backlog of customer-ordered boats is waning.”

“We are having trouble getting people to close,” wrote one dealer. “It certainly is a culture and process thing, but I have talked to many other dealers and they are having the same problems this spring. Weather has been a factor, but it also feels like the consumer is much more cautious than they were last year.”

Several dealers commented on steep price increases as being deterrents to new boat sales.

“The price of new boats is pricing too many people out of the market,” wrote one respondent. “These 5 percent to 7 percent price increases each and every year have to stop!”

“Boating has now priced out the middle-class buyer,” said one retailer. “Only the near rich/very rich can boat.”

“Price increases [have] priced too many customers out of the market,” wrote yet another. “Weather killed us in the first part of March.”

Weather, workforce shortages, and lackluster or absent manufacturer promotions also made the list of dealer complaints. Negative media reports about the economy also made the list of things that weren’t working for dealers, as well as print advertising.

Some said manufacturers had caught up with demand, while others commented that they were still having trouble getting product on time and said quality was lacking when they did get boats.

One said that poor quality “is becoming [an] epidemic, where dealers are the quality control department for the manufacturer. Horrible business plan. Dealers don't have time for this. This has been going on for months.”

“New boat inventory comfort continues to improve, but gradually,” wrote senior Baird research analyst Craig Kennison in the results.

More dealers still report inventory is too high — 41 percent — than the 11 percent that felt it was too low.

Used inventory remains relatively lean, as 52 percent reported it was too low versus 22 percent that thought it was too high, but added that used inventory may be coming back into the market.

"Value buyers and non-new boat buyers are making a comeback since there are again many used boats available,” said one dealer.

Read more about the survey results in the May issue of Soundings Trade Only.

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