March electronics sales drop
Gas prices, housing slump, Easter cut spending
By Danny King -- Video Business, 4/16/2008
APRIL 16 | Electronics sales may have mirrored a drop in overall retail spending last month as high gas and food prices and a slumping real estate market caused consumers to cut back on their gadgets. The Easter holiday, which took place in April last year, also cut demand.
Sales of electronics and appliances fell 1% from a year earlier, or 0.1% more than total retail sales declined from March 2007, the National Retail Federation said in a report this week. Electronics and appliance sales decreased 0.4% from February, the NRF said.
The decline echoed last week’s results in an International Council of Shopping Centers report that said last month represented the largest year-over-year March decline since 1995. ICSC, which didn’t include electronics retailers because of the recent Best Buy and Circuit City quarterly reports, said March retail spending fell 0.5% from a year earlier.
A continued decline in housing prices could cause a further drop in demand for high-ticket electronics items such as flat-screen TVs and Blu-ray Disc players. U.S. consumer electronics sales fell 4.3% in the fourth quarter, as falling housing prices caused electronics spending to drop more than 10% in markets such as Sacramento, Calif.; Tampa, Fla.; and Phoenix, NPD Group reported earlier this month.
“Record high gasoline prices and consumers’ worry about the economy will continue to curb discretionary spending power,” ICSC said in its April 10 report.
Statistics breaking out March’s electronics sales will be made public later this month, leading some to believe that a drop in demand for household appliances is the primary reason for the decline stated in the NRF report.
“We think electronics will follow retail but will overall show more strength than other retail categories,” said Shawn Dubravac, economist at the Consumer Electronics Assn., who added that the maturing MP3 player and digital camera markets might show weakness. “Consumers are still buying TVs, and Blu-ray looks to be holding up very well.”
U.S. electronics leader Best Buy said earlier this month that earnings for the quarter ended March 1 fell 3.4% to $737 million as same-store sales fell 0.2%. Last week, No. 2 electronics retailer Circuit City reported a fiscal fourth-quarter operating loss, as weaker video-equipment sales offset revenue gains for flat-panel TVs and videogaming products.
