CE Holiday Sales Declined 5.7%: NPD

By Alan Wolf -- TWICE, 1/13/2009

Port Washington, N.Y. — Holiday sales of consumer electronics fell 5.7 percent at retail despite an increase in online orders, The NPD Group reported today.

CE sales totaled $7.5 billion for the five weeks from Nov. 23 to Dec. 27, according to point-of-sale data gathered by the market research firm.

Sales fell for four out of the five weeks, with the biggest drop recorded during Christmas week when sales declined 24 percent.

Broken out by channel, CE sales through brick-and-mortar stores fell 8.1 percent, while online sales of electronics increased 7.1 percent.

Despite the downturn, spending at brick-and-mortar stores was up for the top-five revenue categories, which accounted for 51 percent of CE retail sales — up from 48 percent in 2007 and 43 percent in 2006, NPD said. The top-five sales generators in descending order were:

œ LCD TVs, which grew 24 percent in units and 12 percent in dollars;

œ notebook PCs, which grew 13 percent in units but were flat in dollars as the average selling price (ASP) dropped from $692 to $610;

œ MP3 players, which slid 3 percent in units and 12 percent in revenue;

œ digital cameras, which dropped 9 percent in units and 21 percent in dollars as the ASP fell to $129; and

œ mobile navigation, which grew 5 percent in units but fell 24 percent in dollars.

“Given the economic conditions and the fact that there was no must-have product, the emphasis is more on how to make the most of what you have and not necessarily about the latest and greatest gadget,” said NPD industry analyst VP Stephen Baker.

“Another factor that played a part in the decline of [brick-and-mortar] sales is the increase in online sales. This year we saw a greater emphasis by retailers and pure-play driving consumers to their Web sites, but it just wasn’t enough to increase the total market, where sales were off by $500 million.”