Sales are reported to be down at Apple’s retail stores, as the company’s distribution network widens, and as customers hold on to their hard-earned dollars as they await new products from the Cupertino company.
Sales throughout Apple’s vaunted retail empire have begun to decline as the company’s distribution network widens and the product line matures, according to a new report, though the outlets remain massively profitable and serve as a “magnet” for new Mac buyers.
March saw same-store sales drop 5%, following a 3% bump in December. The data was compiled by Needham analyst Charlie Wolf.
Wolf believes a lack of major new product introductions, which traditionally drive traffic into stores, is a major factor. Also behind the drop, more of Apple’s products are becoming available via other retail outlets.
“The sales performance of the Apple Stores is also hostage to the company’s distribution strategies,” Wolf wrote. “To illustrate, Mac sales in the stores were adversely impacted in 2009, when Apple broadened Mac distribution in the U.S., adding other chains, such as Best Buy, as resellers. iPod sales in the Apple Stores tanked when iPod demand caught up with supply and Apple responded by vastly increasing the number of outlets selling the product. Same-store sales have also been affected by the roll-out of the iPhone to carrier stores around the globe.”
Wolf also argues that sales aren’t the most important indicator of Apple’s retail chain, rather its piece of the Apple revenue pie – Which hasn’t fallen dramatically – and the ability of Apple retail stores to attract more customers are important measuring sticks.
“Despite the dramatic expansion of Apple’s distribution network to the stores of 250 carriers, the Apple stores have managed to almost hold their own as a percentage of total Apple revenues,” says Wolf. “This underscores the vitality of the Apple Stores in creating a shopping experience that we believe is superior to that in any other retail chain.”