AVAC in Myrtle Beach the victim of big box competition, change in buyers’ habits

02/07/2013 10:18 AM

02/08/2013 2:06 PM

What may be Myrtle Beach’s last locally-owned electronics and appliance retail store likely will close for good in March, the victim of the recession, aggressive pricing by Asian television manufacturers and changes in consumer habits.

AVAC, Audio Video Appliance Center, had been a fixture on the local scene since 1990, known for its discount pricing of electronics and copious advertising to draw in customers.

“This is a really sad time for us,” said Keith Ferrell, AVAC president who founded the company with his father in 1990. “It’s like watching your child leave home forever.”

Ferrell said the business had been considering its end for about a year because a slump in its sales of televisions. He said that sales were good at the first of 2012 and company officials thought at the time that the store would be able to remain open. But then sales turned sour in the summer and sealed AVAC’s fate.

Ferrell said the store will operate as normal for several weeks and then begin the process of clearing its inventory to close.

He said he does not know specifically what will be the store’s last day, but expects it to be within 1 1/2 months. His father owns the building and land on Mr. Joe White Avenue, Ferrell said, and he doesn’t know what his father plans to do with it.

Ferrell said there was a time when retailers such as AVAC were protected from too much competition because American manufacturers would limit dealers that could carry their products within a geographic area. But that changed with the surge of Chinese and Korean manufactured televisions since the start of this century, and the independents were forced to compete with the likes of big box stores such as Wal-Mart and others, he said.

Ferrell said big box stores began selling televisions below cost to attract customers into their stores with the hope they would buy other items. In much the same way, grocery stores may discount the price of milk or other things to lure customers.

AVAC kept up for a while by joining a buying cooperative that had the leverage to get favorable wholesale pricing from manufacturers.

But the big change came, Farrell said, with the onset of the Great Recession.

Buyers began choosing what they would buy on the basis of price alone. To compound the problem, Ferrell said that when Wal-Mart started carrying LG televisions, the manufacturer pushed back deliveries to independents.

“We didn’t see the light at the end of the tunnel,” Ferrell said.

Chuck Smith, a professor of business and marketing at Horry Georgetown Technical College, said the loss of brand consciousness among consumers has been a significant factor in television sales.

“We’ve lost product differentiation in that we don’t care if it’s a Samsung or an LG,” he said. Price is the key to sales now.

Smith said the electronics market also has been impacted by online sales, a factor he said is central to Best Buy’s decision to close some of its stores this year. He said consumers would go to Best Buy stores to “test drive” electronics they were thinking of buying. Once the decision was made, they would then make their purchases online.

Having to fight both the Internet and much larger stores, Smith said, put independents such as AVAC at a disadvantage.

“When we look at a local store,” he said, “it makes it harder to compete. When the market slows down, they are immediately impacted.

Ferrell said he moved to this area because his mother and father retired here. He worked for an electronics supplier and his father had 30 to 40 years experience in the business. So when Ferrell found himself out of a job, the two decided to open their own shop.

He said AVAC had as many as 16 employees in the mid to late 1990s, but that number has dwindled to just five.

He said that while all of his customers were local residents, he like other area merchants thrived because of tourism. He said he had contracts with some major hotels as the supplier of the televisions they installed in guest rooms.

“We had a heluva run,” Ferrell said.

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