MIA NEWS an update from your industry trade association


Some music services are taking pre-


emptive action ahead of the Henley Report


know the rhetoric about how hard it is and that we are ‘all in it together’ (yeah, right). This has to be the hardest


Under siege? T


he age of austerity is upon us, credit squeeze, downturn and so on. We all


HMV has just lost 20 per cent


trading climate we have seen in a generation. There is no reason to believe it will end after Christmas. Many people expect the ‘ripple effect’ of the government cuts to affect most of 2011. Recent Office of National Statistics research has highlighted that weekly household spending has already decreased by four per cent. This is more alarming than it might sound, when compared to the previous trend of increases and the priority expenditure of food, bills and the like, meaning the squeeze on family spending is going to be especially felt in the so-called ‘discretionary’ spending area. That means leisure items – that means musical instruments. You certainly don’t need me to tell you how hard it is out there for most of you – and that was before the awful weather killed off some essential pre- Christmas trading days.


80 miPRO JANUARY 2011


of the value of its company further to the announcement from its CEO that losses are looking ‘scary’. HMV is always worth monitoring as recorded music and making music share similar territories and fortunes. The recent survey of the UK’s top 500 towns and cities shows between ten and 18 per cent of shops as vacant. These figures are offset to some degree by relative growth in numbers of supermarkets, discount stores and (wait for it) charity shops. Added to that, we will no doubt see an uplift in online retail during the back end of 2010 (though most shops in MI are now part of that business).


I DON’T NEED THIS PRESSURE For our industry in particular, we also have three additional pressures…  The outcome of the Henley Review of Music Education. This might be good for the industry, it might not. In the meantime, there are a number of Music Services taking pre-emptive action, affecting many music teachers and young musicians.


Paul McManus of the MIA offers a personal perspective on the current economic situation and relates it to MI retail. Is it time to circle the wagon train? Or should we be preparing for battle...?


This filters down into levels of lessons and products purchased.


 Stock availability is inconsistent on brands that the customer wants to buy now and expects to find in stock. A recent Music Trades survey showed that there is a high level of customers today who are not prepared to wait weeks or months for their instrument. The report showed a large number that would switch brands rather than wait.


 Third, there is no getting away from the fact that the average music shop is now operating on a gross margin around 20 per cent less than it was a few years ago. The same cannot be said for rates and rent. This is not exclusive to MI (electrical shops have even lower margins), but it makes an increasingly challenging proposition of being able to make a profitable living from running a bricks and mortar music shop.


BUT, IN SPITE OF ALL THIS… Our industry is a damned resilient one and we have successfully weathered tough


climates before. We still have a similar amount of music shops trading throughout the UK compared to ten years ago. We passionately believe in music and the positive impact it has on people’s lives. We are a pretty unique industry because the vast majority of us are musicians who totally relate to the products we sell (I bet the average non-music shop on the High Street would love to be able to replicate the


Value for money is too good and this is something that will see some


“


changes in 2011. Paul McManus


passion and knowledge that we bring to our shops). We are selling good quality


products that (in real terms) are truly amazing value for money. Actually, value for money is too good and this is something that will see some changes in 2011 as a result of company initiatives and the EU Law Report that the MIA published in October.


get better and we will still have a great workforce running an amazing range of MI shops throughout the UK. Everyday we make someone’s


life better by getting them into our world and making music. Long may we do what we do. MIA: 01372 750600 Paul McManus paulmc@mia.org.uk


WWW.MI-PRO.CO.UK I also suspect that some


suppliers of instruments will take a closer look at which shops they are supplying and reflect on whether they are helping or hindering the brand and the other shops that sell it.


THE FUTURE’S BRIGHT We are certainly not out of the woods yet and we have a sustained economic downturn to weather, but, it will eventually


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