Gun and ammo sales nose-dive as fears subside over tightening gun legislation.
The gun and ammunition industry is coming off record highs, with gun sales plummeting in January.
This comes on the heels of a frenetic sales run-up, fueled by fears of stricter restrictions on guns in the wake of the Sandy Hook Elementary shooting and other massacres and President Obama’s re-election, CNNMoney says.
Background checks by the Federal Bureau of Investigation, a leading indicator of gun demand, nose-dived by a third in January, compared with the same period in 2013. “There were about 1.66 million background checks last month, and nearly 2.5 million in January the year before,” reported CNN.
The fear of tighter gun control laws initially drove the surge in firearm sales, but Obama’s proposal to re-enact the assault rifle ban failed in Congress. According to Bloomberg Businessweek, Smith & Wesson CEO James Debney said the industry is “coming out of this surge period into what we would call a more normal environment, which is generally free of influence of some fear or uncertainty about increased legislation.”
The Wall Street Journal reported that outdoor gear retailer Cabela’s Inc. cited a decrease in sales of guns and a significant drop in ammunition buying for a 10 percent decline in fourth-quarter sales. “The surge in firearms and ammunition is clearly winding down,” Cabela’s CEO Thomas Millner told the Journal. Millner called the earlier sales run-up “a bubble.”
Despite the recent plunge, CNN reported that firearm sales are still surpassing monthly sales that preceded Obama’s re-election.
“So we have come down from the peak but the valley floor is higher than before November 2012,” said [Lawrence Keane, spokesman for the National Shooting Sports Foundation], in an email to CNNMoney. “The consumer base has grown. This is because for the past few years, retailers tell us that about 25 percent of customers at the checkout counter are first-time buyers. Huge increases in the number of woman buyers.”
Are guns a good investment? Money Talks News founder Stacy Johnson did this video report in mid-2013.