Consumer Electronics Dealers Stage Post-Christmas Clearance Sales

By Alan Wolf -- TWICE, 12/29/2008

New York — Consumer electronics dealers are pulling out all the stops to move remaining merchandise following the Christmas holiday, including clearance sales that are exceeding Black Friday in their intensity.

The promotions reflect a dismal holiday selling season in which total retail sales, including food but excluding gasoline, were down 2 percent to 4 percent year over year, according to the latest SpendingPulse report by MasterCard.

The report, based on aggregate retail and service sales activity in the MasterCard payments network, plus estimates for all other payment forms including cash and check between Nov. 1 and Dec. 24, also showed that retail sales of consumer electronics and major appliances sank by more than 26 percent during the period.

Michael McNamara, research and analysis VP for the MasterCard subsidiary, said big-ticket CE and majap goods took the biggest hit this season. “Sales above $1,000 have been a consistent drag on this sector throughout the season,” he said.

E-commerce sales declined only 2.3 percent as poor weather during the final days before Christmas sent shoppers online, the report suggested.

“A difficult economic environment combined with unfavorable weather during the last week of shopping made 2008 one of the most challenging holiday shopping seasons in decades,” McNamara said.

CE retailers are resorting to aggressive post-Christmas price promotions to move merchandise, with clearance sales surpassing the lows of Black Friday. Among the specials:

· Sears offered up to 75 percent off select CE items during a five-hour doorbuster event on Dec. 26;

· Sixth Avenue Electronics is currently selling Panasonic’s 42-inch 720p plasma TV for $595 during a four-day clearance sale;

· P.C. Richard & Son is offering Logitech’s $100 Harmony universal remote for half off as part of its “$100 million year-end sale”; and

· Costco’s online arm is bundling Sharp LCD TVs in parings that include two 42-inch 1080p panels for $1,500.

Meanwhile, Wal-Mart hopes to boost CE department traffic with yesterday’s expected rollout of Apple’s iPhone 3G to nearly 2,500 stores. The retailer is carrying the 8GB model in black for $197 and the 16GB model in black or white for $297, both priced $2 below Apple’s price. Gary Severson, Wal-Mart’s entertainment senior VP, confirmed that CE department sales associates “have been preparing for many weeks” for the iPhone’s arrival.

Best Buy countered the rollout by cutting the price of its 8GB and 16GB iPhones by $10 through Dec. 31.

But all was not doom and gloom during the holidays. Amazon.com announced that the season was its “best ever,” with more than 6.3 million items ordered worldwide on its peak day of Dec. 15, although the e-tailer didn’t indicate whether its Christmas business was profitable. Top CE sellers included Samsung’s 52-inch, 1080p 120Hz LCD TV, the Apple iPod Youch 8GB music player, and the Acer Aspire One 8.9-inch netbook in sapphire blue.

Amazon aside, the dismal holiday selling season prompted the National Retail Federation (NRF) to urge Barack Obama to quickly enact a fiscal stimulus package that includes a series of national sales tax holidays. “The situation is critical,” the trade group said in a letter to the president elect, which was signed by Mike Ullman, chairman/CEO of JCPenney; Philip Francis, chairman/CEO of PetSmart; and Stephen Sadove, chairman/CEO of Saks.