The economy is hurting but CE sales will remain relatively healthy compared to other industries, with a 3.5 Percent increase expected during the fourth quarter, roughly half of last year’s growth.
"It will be bad across the board, except for CE products," Shawn DuBravac, a Consumer Electronics Association economist, said during a presentation of the 15th annual CE Holiday Purchase Pattern Study at the CEA Industry Forum here in Las Vegas.
The National Retail Federation recently estimated that Q4 sales throughout the general retail industry grow only 1.9 percent, one of the lowest increases recorded since the NRF survey began in 2002. CE retail sales will fare slightly better, with such segments as A/V growing at 3.9 percent, accessories at 4.6 percent and video games at 5.6 percent.
The holiday forecast was conducted with 1,000 U.S. adults and fielded from Sept. 25 to Sept. 28. The margin of error is plus or minus 3.2 percentage points.
In the survey, CEA found that consumers' total spending around this holiday season is expected to drop 14 percent to $1,437 from $1,671.
Spending on gifts is expected to drop 15 percent to $750 from $804 last year. But the amount of gift expenditure allotted to CE products is expected to rise to 28 percent or $210 from 22 percent or $194 last year.
"It's certainly a historic time and we're seeing things in the financial markets we have never seen before," DuBravac said. "But for our industry, all is not lost. We're certainly holding up better than some other industries."
The findings, co-presented with Tim Herbert, CEA's senior director of research, touched upon many different CE segments and trends that can help retailers choose which products and demographics to focus on through the next year.
While some of the numbers, given the state of the economy, seem somewhat positive, about 20 percent of consumers surveyed said they plan to eliminate spending on CE products. That's compared to 31 percent who don't plan to buy any sporting goods, 28 percent who are cutting out furniture purchases and 26 percent who plan to cut out vacations. Only six percent plan to stop buying clothing and shoes, while 11 percent will eliminate cable or satellite TV subscriptions and eating out in restaurants.
Overall discretionary spending, which has fluctuated over the years in sync with the highs and lows of the economy, has settled at about two percent of consumers' durable good spending this year, down from a high of about 17 percent in 1983. But the amount spent on technology as a percentage of consumer durable goods spending has steadily increased since 1980 to about 17 percent this year.
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