Increase in vinyl sales helps independent music stores

VINYL represents 30% of sales for Auckland-based music retailer Real Groovy and its owner expects that percentage to increase.

Growth in vinyl sales is a welcome trend for independent music retailers in New Zealand, who have seen significant increases annually in LP sales over the past four years.

“Sales of new vinyl have increased five-fold in the past four years, and second hand sales, which were already high, have doubled,” says Chris Hart, owner of Real Groovy in Auckland.

Though vinyl is a growth area for the independent record store, the market is still too small to interest big record companies, says a Sony representative.

Noel Barkley, sales and business development director at Sony, says that vinyl may be the only thing growing in the music business aside from digital technologies, but it still only represents about 1% of music sales worldwide.

“In Europe they can sell vinyl because they’ve got over 80 million people in Germany, but we’re pretty small here – there’s just not the demand.”

However, Mr Barkley says vinyl works for independent retailers because they have a higher profit margin and are able to cut out the middle man.

The facts support Mr Barkley’s assesment.

Real Groovy are able to sell new alternative and metal LPs at twice the value of new CDs in those genres.

Slowboat Records in Wellington is another music retailer benefiting from the growing number of music lovers wanting to invest in vinyl.

Employee Jeremy Taylor says that new vinyl buyers are rejecting the prevalent downloading culture for a number of reasons.

“You don’t need thousands and thousands of records,” says Mr Taylor.

“Customers are starting to think about how they assemble a collection of music that actually means something to them.

“The 12-inch black LP is so iconic – when there is a continual thrum of music everywhere you go, the difference is that records feel like a treat.”

Although Mr Hart agrees that the illegal downloading of music has represented a threat to independent retailers, he thinks that that the entry of big retailers into the market has had the most significant impact on the independent record store.

“Downloads have affected all music retail, but the biggest impact on independent stores has actually been big box retailers [chain stores] that are using CDs as loss-leaders – often selling below our cost price – to attract customers to their stores for high-profit items.”

For this reason, Mr Taylor believes that independent record stores cannot compete price-wise if larger stockists choose to sell vinyl, and the independent record store’s success will depend on the consumer’s desire for a face to face interaction when buying music.

Mr Taylor says that it’s not just the retailers benefiting from the renewed interest in vinyl, citing local metal band Beastwars as an example of how local musicians stand to gain as demand for vinyl increases.

The niche band from Wellington sold out all 300 copies of their debut album on vinyl, a feat Mr Taylor says is very impressive.

“If you had told me five years ago that a fringe New Zealand band would independently release and sell out 300 copies of an album on vinyl I would have said good luck to you,” he says.

Although that many copies would not generate a profit large enough to interest industry heavyweights like Sony, for Chris Hart the profit margin is significantly higher, making vinyl a lucrative product.

In a market where competition is fierce and retailers are struggling to make a profit, vinyl is proving to be one of the few consumables that can make money for the little guys.

“The biggest effect [of the increase in vinyl sales] will be in enabling independent record stores to survive.”

Steve Smith visiting Auckland for the first time to see Innie rockers the Bloody Souls was pleasantly surprised to find such an excellent selection of Indie Metal vinyl just steps from his Auckland CBD Hotel.


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