Marine retailer sentiment held fast in September as the boating season wrapped up in many parts of the country. But the three- to five-year outlook declined by three points, bringing it down to 26 from 29 in August. A neutral rating is 50. Some 64% of dealers reported retail declines in September compared with 16% who said they saw growth. Preowned boats weren’t much better, with 66% of dealers seeing sales decreases and 12% saying they saw a boost.
Inventory, perhaps one of the worst subjects for dealers, continued to furrow brows, with 84% of retailers reporting that they had too many new boats on hand compared with 1% who said they didn’t have enough. For preowned boats, 48% of dealers said they had too much inventory, while 22% said they didn’t have enough.
In this month’s Pulse Report, Soundings Trade Only, Baird Research and the Marine Retailers Association of the Americas surveyed 98 dealers asking about retail sales trends, how they are managing inventory, which obstacles are causing the most frustration, and how they’re trying to help their business succeed in a volatile market.
“The real question should be, ‘Why is nothing working?’ ” one dealer said. “No one seems to even be shopping. Promotions from manufacturers remain attractive, and boats are heavily discounted but are being offset by significantly higher lender interest rates, tighter underwriting, economic uncertainty and a dismal government inactivity. They have all conditioned consumers to be fearful of any major purchase.”
Dealers who are moving product said they’re selling at lower margins, using cash rebates and finding lower finance rates for buyers. “We are waiting for the manufacturers to come with some aggressive programs in October,” one dealer said.
Dealers who pay attention to the details seemed better-positioned to come out of a slow fall. “We are trying to tighten our practices and procedures,” one dealer said. “Cracking down on time-tracking and spending.”
Another added: “We have kept key stats on our business and market for the past 30-plus years. We operate a living budget, and it’s the time of year to set the 2024 budget. Having the past performance data available for us to review allows us a better glimpse of what we might expect the next 12 to 18 months will look like, and budget accordingly.”
When sales slowed, other dealers said they ramped up service to sustain them. Others focused on training and educating sales teams to adapt to the changing post- pandemic market.
Employee retention remains a challenge, and dealers said it will take effort to keep good people on their teams. “We are trying to reduce expenses as much as possible to free up some cash flow and increase our employee pay,” one dealer said. “We increased our labor rate to help. I believe that employee retention is key and will be for a while.”
This article was originally published in the November 2023 issue.
