Music merchants says the year is ending with relatively good cheer, thanks to a combination of factors in their Christmas stockings: a great release schedule, less aggressive music discounting, and comparisons to a disastrous 2008 Christmas season. It’s about as good as gift as they can hope in market that, at best, is flat when compared to last year.

While Nielsen SoundScan will not release Christmas week's sales until Wednesday (Dec. 30), traditional and non-traditional music merchants report that Christmas has been flat to strong, though big-box merchants are expected to post a decline. The big-box results are expected to cancel out any combined gains posted in the other two categories, leaving the overall holiday selling season in line with the rest of the year. Album sales are down about 13% and CD album sales are down almost 19% for 2009, according to Nielsen SoundScan.

Merchants that still carry a wider breadth of music catalog titles say they are cautiously optimistic.

"We got good product this year and it’s selling," says a senior retail executive at one chain. "My top 50 [CD albums] has been selling this year," as opposed to last year, which he says was a catastrophe. Like every other merchant, the executive pointed to Susan Boyle's "I Dreamed A Dream" as the release leading the charge for music.

Another senior executive says that his chain has been trucking along, staying close to flat on a comparable-store basis. "Music is cranking right along," he reported. "We will be ahead of budget but down from last year. But beyond music, every day during the holidays, we are up either about 2% or down about 2% on a comp-store basis."

At Newbury Comics, CEO Mike Dreese reports CD sales were up slightly—4% on a unit basis for December, going into the last week before Christmas, at the 28-unit chain based in Brighton, Mass. Meanwhile, the six-unit Dimple chain in Sacramento, Calif., says comparable-store sales were up 5.23% while gross profit was up 10.67% for the chain during December, according to the chain's head buyer Dilyn Radakovitz. Radakovitz said that, while CD sales decreased during the holiday selling season, the category was not down as dramatically as it had been during the first half of the year. She said the chain relied on video games to drive traffic to its stores, and as a result, music was a beneficiary.

Stores Get A Boost

Other factors played into this year’s results: merchants didn't have to discount CDs as aggressively this year as last, thanks to the big-box merchants allotting much less space for music in their advertising circulars, and there were no going-out-of business sales from Circuit City to compete against this year.

Also, stores that rely more heavily on music reported that record store closures and reduced music inventories at big-boxes helped them pick up traffic this year.

Moving over to wholesalers, Alliance Entertainment president Alan Tuchman said the holiday selling season went well for his company, especially with its wholesaling to indie store accounts and fulfillment for its e-commerce clients. But the company's rackjobbing operations reported a decline in CD sales declined. Tuchman speculated that the vanishing music space in big-box stores is helping those merchants that still focus on catalog sales.


Digital sales are not only expected to be a big factor for the week just ended and the ongoing one. They will also drive sales through January, thanks to new iPods and iTunes gift cards received on Christmas. But SoundScan doesn't release digital sales until Dec. 30, and top-seller lists from digital merchants, which usually give an indication of how the week's sales played out, were unavailable at press time.

Overall, merchants say the holiday selling season of 2009 is quite a contrast with how last year closed. With the economic downturn in the last three months of the year, "we were desperate in general and really scared because October and November were disasters," Dreese recalled.

Gallery of Sound's VP of purchasing Joe Nardone Jr. went even further, saying that "this year wasn't as bad as last year, which was a disaster. But it’s hard to predict what will happen next, although now I am cautiously optimistic for the new year."

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