M+E Daily
Retailer Hastings’ Response To Redbox Drives Rentals
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“Our movie rental business was negatively impacted by the de-valuing of the price of a rental movie primarily as a result of the growth of rental kiosks that rent movies for a dollar per day,” Hastings Entertainment CEO John Marmaduke says in the company’s latest earnings report.
But the retailer responded with its own promotion where thousands of movie titles in our stores now rent for $0.99 per week. “This has lowered our rental revenue in the short-term; however, we are seeing a significant increase in units rented along with growth in new customer membership sign-ups,” Marmaduke says.
Units rented increased 10% in the third quarter over the comparable quarter in the prior year. Meanwhile, total unit sales increased 6.9%. “Our core customer base remains stable,” Marmaduke says. “However, customer purchase behavior has shifted toward value priced merchandise.”
Hastings, which reported a net loss of $2.1 million for the first nine months of the year, is cautiously optimistic for the fourth quarter “due to our value merchandising initiatives, improved store execution, and the closure of over 20 entertainment competitors in our markets.”
