Downward Sales Spiral Intensifies, Floorspace Threatened

Album sales declines are only intensifying this quarter, and that could further threaten floorspace next year.

Just recently, Pali Research analyst Richard Greenfield pointed to year-over-year declines of more than 25 percent – for the second straight week.  And every weekly reporting period since Thanksgiving has featured a decline of greater than 20 percent.  “Given that the holiday season is the most important selling period of the year for the industry (with Q4 now destined to be the industry’s weakest quarter this year), we are increasingly concerned with floorspace reductions from large retailers in 2008,” Greenfield opined on Thursday.

Traditional record retailers are undoubtedly feeling the pinch, and that is placing increased importance on stocking decisions at mega-retailers like Wal-Mart.  Overall, consumers are clearly showing a decreased appetite for albums, but even breakouts are mostly absent from the picture.  “Albums simply are not selling, with this past week only 12 albums selling over 100,000 copies compared to 26 during the same week last year,” Greenfield noted.

Among the exceptions are Long Road Out of Eden, an Eagles release exclusively distributed by Wal-Mart.  And a Josh Groban Christmas album, Noel, is now pushing towards 3 million copies – a total that could make it the strongest seller of the year.

Greenfield, “More Music Stores Closing with CD Sales Falling Over 25% a Week”