Independent retailers have chance to outlast bigger stores: prof

Cassandra Kyle, The StarPhoenix

The changing tune of retail music sales in Canada may prove beneficial for Saskatoon's big box and independent music merchants, as stores focused on selling CDs disappear from the scene.

Retail outlets not relying on profits from CDs to remain in business aren't as likely to suffer the same fate as a string of North American music stores that have shut down because of low sales, said David Williams, associate professor of management and marketing at the University of Saskatchewan. Last week, the once-popular Music World chain revealed it is under bankruptcy protection and will close its stores countrywide. The chain, which operates one store in Saskatoon and 71 others across the country, will lay off all of its 648 employees by Jan. 31, 2008.

In a recent interview with CanWest News Service, company president Kai Voigt said the closures don't spell the end for the company. Voigt indicated a shift toward online sales and an expansion into areas other than music.

Diversification of product has helped other music retailers, such as HMV, survive as digital music continues to grow, said Williams. He adds that in addition to the Internet, more people are buying their music at places like Wal-Mart, Starbucks and Future Shop -- stores not solely relying on music sales for profit.

Saskatonians will always have opportunities to purchase music, but probably not in the traditional way, he said.

"Sam the Record Man has gone down, Music World has gone down, Virgin has sold off, Tower Records has gone under. Even record companies are having problems; they're pushing online . . . they're lifting restrictions and making music available," Williams said. "If people want the latest, greatest hits, they'll buy it. When they do their groceries they'll buy it, when they go to Future Shop (they'll buy it). If people want new music and up and coming stuff, they'll download it."

Independent stores, which often specialize in a certain type of music or album format, could also become more popular as their niche markets strengthen. In Saskatoon, Williams said places like Tramps Music and Books, The Vinyl Exchange and Vinyl Diner CDs and Records, which have already cultivated loyal customer bases, may gain new shoppers looking for albums not carried in box stores.

"No matter how old or overcrowded or declining a market may get, in the mainstream there are still smaller fringes for a niche -- a little segment -- like Tramps, (which is) local and independent, same as the Vinyl Exchange," he said. "They may also have to diversify what they sell. I'm sure Tramps isn't just relying on sales of CDs."

Ed Wilson, a manager at the Tramps location on First Avenue North, said sales of DVDs, books and comic books help supplement profits taken in by CD purchases. While music remains their most popular item, the employee doubts the store owners would ever make the move to become a CD-only retailer.

"I think not. It's sort of all one big cohesive whole, so we need all of it, and I don't think we would want to try to just do music by itself now," Wilson said. "We've got people who trade in their CDs here, or sell their CDs here, and are less interested in getting more CDs because they can get music from the Internet now."

At the Vinyl Diner on Broadway, owner Stu Cousins said a combination of loyal customers and specialized product keep sales steady. Independent retailers are able to provide product not readily available in mainstream outlets, he explained, adding he believes stores like his will outlast the competition.

With the music retail dilemma playing out not just in Saskatoon, but in cities across Canada and the United States -- and with once-profitable music stores going under -- Cousins wonders if his theory will prove true.

"I think it would be interesting to know what's happening in other cities too. Is this is a nationwide or even North American-wide thing where independents are surviving and chain music stores are falling by the wayside? My sense is that's what's happening," he said.

ckyle@sp.canwest.com