Amid the music industry’s 10-week sales spiral, merchants have a new concern: Aggressive pricing on high-profile releases is threatening to turn Black Friday, retailers’ highly profitable day after Thanksgiving, into a red one for stores devoted to music.
While music sellers spent the weekend of Nov. 20-21 worrying about whether U.S. retail would again be swamped with street-date violations, Sunday circular advertising for Nov. 23 releases revealed a new level of loss-leading on the part of two big-box merchants.
In its Nov. 21 circular, Target had the Nirvana boxed set priced at $27.98, or $10.11 cheaper than its wholesale cost of $38.09. The box is list-priced at $59.98. Even with a 5% buy-in discount, which brings the wholesale cost down to $36.19 on initial orders, Target is still losing $8.20 on each unit sold, not including whatever cooperative advertising dollars it received from Universal Music Enterprises. [more @ www.reuters.com]