Barely was it mailed and posted than there were further developments.
One of the channels I didn't use as an example, office supplies, nonetheless demonstrated that the same principles apply to it -- according to this report, #3 Office Max may be bought by Staples or Office Depot.
OfficeMax Inc., the third-biggest U.S. office-supplies retailer, may be a buyout target for rivals Staples Inc. or Office Depot Inc. in an industry "that only needs two large players," a Credit Suisse analyst said.And Tweeters said it may follow up the closure of a third of its stores by going Chapter 11.
The office-supply sector may follow supermarkets and department stores in consolidating as revenue growth slows, Gary Balter, a Credit Suisse analyst, said today in a research note.
The Dallas Morning News has a good summary of the rapid consolidation of the electronics channel:
All over Dallas-Fort Worth, consumer electronics chains CompUSA and Tweeter are closing stores after losing turf battles to two powerhouses – Best Buy and Wal-Mart.
Soon their easy-to-identify but empty stores will join the unmistakable shells of former Ultimate Electronics locations around North Texas.
Consumer electronics retailers are reeling from the faster-than-expected price drop last Christmas for their hottest product. On Thanksgiving weekend, prices for flat-panel TVs dipped below $1,000.
"The flat-panel TV pricing collapse last Christmas set a chain of events in motion. The television is the pillar of business for consumer electronics chains," said Alan Wolf, retail editor of Twice Magazine.
It's a lengthy article with lots of good info on the channel (I didn't know that Wal-Mart is now #2 in electronics, though it isn't a surprise).
Update (Monday): USA Today reports that Wal-Mart is going to ramp up its efforts in the electronics channel (not satisfied with being #2?) and, no surprise, Circuit City will suffer as a result:
"This is not good news for other people and is great news for Wal-Mart," says John Champion, a retail analyst at consultant Kurt Salmon Associates. "Any time Wal-Mart moves the needle a little bit, it's a tidal wave for everyone else."
Circuit City, trying to recover from a missed bet on wide-screen TVs and other challenges, could be hit hard.