Sales and sentiment improve in August, but dealers are still concerned

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Pulse -August Sentiment-3

August retail trends seem to indicate improved dealer optimism and sales, according to a new survey, but metrics still remain in negative territory.

Dealer sentiment in August rose on both current conditions, measuring 44 versus 34 in July, and the three- to five-year outlook, which measured 46 versus 36 in July, according to the Pulse Report, a retailer survey conducted by Baird in conjunction with the Marine Retailers Association of the Americas and Trade Only Today.

Of the 86 dealer respondents, more reported declines than growth in new boat sales, with 42 percent saying they saw sales weaken versus 31 percent who grew sales. Trends improved over July when 53 percent reported declines and 29 percent saw growth.

Government action/inaction was cited as the main headwind as weather across the country improved.

“The hot spot in the economy still eludes our area of the country,” wrote one dealer. “The fear now is that the consumer has started to believe their financial statements and not those that are hyped in the media, resulting in a serious slowing in sales across the board.”

Dealer commentary varied drastically, apparently depending on segment and geography, and some said sales had been robust since the weather improved.

“The customer finally decided now is the time to buy,” wrote one retailer. “Unfortunately not enough time to make up for a slow season.”

The concern that boat prices were rising too rapidly for middle class Americans to participate continued to dominate the commentary section of the survey.

“Manufacturers are raising prices too much, losing a lot of people that would have bought when products [were] much lower,” said one retailer.

“Program margins are too low for the dealer to remain profitable,” commented another. “Pricing steadily increasing — with little change in content — much faster than inflation or consumers’ income.”

Several expressed continued concern about tariffs and other issues including the upcoming election, political tension, lack of or too many manufacturer incentives, poor product quality and fear that a recession is ahead.

“We have seen credit quality dropping sharply in the last 12 months,” wrote one respondent.

Another worried inventory levels were too high moving into the fall season, adding that the business would have to really focus on how to order 2020 models.

“Current new boat margins are shrinking quickly,” the dealer added. “Sales demand is fading.”

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