Canadian Retail Waits For Xmas To Hit

TORONTO-Canada's leading music retailers are downright unhappy that the window for Christmas sales continues to grow smaller each year.
"Christmas hasn't hit yet," complains Lane Orr, head buyer of A&B Sound, which has 18 stores in western Canada.
Tim Baker, buyer with Sunrise Records, which has 32 stores in Ontario, confirms that view. "We're still waiting for a surge in sales," he says. "It is starting to happen, but I can't remember as many records not doing well. We're below last year's sales so far."
Roger Whiteman, VP of purchasing for HMV Canada, which has 94 stores nationally, agrees that Canadian music consumers have been holding off on their Christmas purchases. "In the past couple of weeks, there's been an improvement, but we're down in sales from last year," he says. "We're banking on a sales surge the last week of December and a good January."
A significant impact on revenue, points out Whiteman, could come from the sale of gift certificates. "We do extremely well on gift certificates," he says.
Orr concurs, saying, "We sell a ton of gift certificates in December. It's a business which has been growing in the past three years. I attribute the growth to people not knowing today's music. If Mom is going in to buy albums for her kids, it's easy for her to buy a $50 gift certificate and let them decide."
Canadian retailers are resigned to seeing Canadian music consumers significantly delay buying music until the last quarter. Last year, for example, only a strong surge in sales during the week leading up to Christmas-followed by strong sales the following week-turned around the holiday season.
"So far there's been no surprises with what's selling," says Orr. "Celine Dion, Rage Against The Machine, and [the compilation] "Big Shiny Tunes 4' are all doing well. There hasn't been a left-field surprise yet. Lou Bega would be the closest."
"Last year we had some really big-selling records early on, but this year nobody knows what the top-selling records will be," says Alex Irwin, GM of retail at the Sam the Record Man chain, which operates 56 stores nationally. "Celine Dion, for sure, is going to be huge, but I couldn't tell you another record that is going to be huge."
Retailers here are generally impressed by this year's offerings but are contemptuous of the majors' release schedules. They criticize the seasonal lateness of last month's album releases by top-ranking acts, including Dion, Enrique Iglesias, Alanis Morissette, Korn, Beastie Boys, Savage Garden, Reba McEntire, LeAnn Rimes, Bryan Adams, and Cher.
"I'd like every big record [to be released] in October," says Baker. "Retailers need these albums going into November so we can build momentum. In some cases, it's going to take another two weeks for people to find out these records are even out."
Randy Lennox, president of Universal Music Canada, rejects such criticism. "Given the fact that we set up albums with marketing and single releases six to eight weeks prior, consumer awareness is at an optimum level on the street date of most albums," he says.
"There not only is a glut of product, but a lot of product is not being worked [by labels]," counters Baker.
Says Irwin, "It's been an amazingly strong fall for new releases, but there are just too many releases getting buried. A lot of them have a strong first week out, and that's it."
Laura Bartlett, president of Zomba Music Canada, suggests that shifting musical tastes are disrupting consumers' traditional buying practices. "The Canadian marketplace has traditionally been a very rock-based marketplace," she points out. "However, rock albums are now only lasting for 10 days at retail and then going away. People today are buying songs rather than recordings by album artists."
The success of compilations on SoundScan's retail album chart underlines the demand for "song-driven" music among Canadian consumers, particularly 12- to 25-year-old buyers. Compilations now represent an estimated 12% to 14% of the music being purchased in Canada, according to industry sources.
Compilations are viewed by label executives as a marketing tool for developing artists and, with the lack of an active singles market, are seen as filling a void in the Canadian marketplace. Many retailers, however, suggest that top-selling multi-label compilations often undercut the impact of artists' albums.
"By picking up quarterly greatest-hits packages, consumers now have all the tunes they want for the year in three or four albums," says Whiteman. "There's been a surge in [those] sales, but these albums are hurting our overall sales."
"Suppliers haven't considered the long-term impact of compilations," says Orr. "Basically, we are telling artists, "You are only good for one song.' I guarantee you that following big [sales] numbers on "Big Shiny Tunes 4,' suppliers will see returns on albums by Blink-182, Goo Goo Dolls, Fatboy Slim, Kid Rock, Smash mouth, Orgy, and Serial Joe."
Several label executives are disturbed that retailers are now so irritated by compilation sales, although Lennox says that "retail has not communicated this concern to us." According to Rick Camilleri, president of Sony Music Entertainment (Canada), "If retailers are concerned, then it is probably time for all labels to reconsider their compilation strategy.
"Nobody wants to cannibalize album sales," he continues. "Our business is about developing and breaking artists. A lot of artists might only have one or two hits [on their own albums]. You risk giving away their only hit-or 50% of them-by including them on a compilation."
Orr argues that labels should sharply boost compilation pricing, as in the U.K., to fully reflect the hit status of the tracks enclosed. Compilations retail here at $14.99-a dollar more than current chart product.
"Charge retailers $30 a unit, and let's see what they do with it," says Orr. "If some retailers still want to sell it at $14.99, that's their problem."