NPD Sees Strong Start For CE Holiday Sales

PORT WASHINGTON, N.Y.— Retail sales of consumer electronics during Thanksgiving week jumped more than 10 percent to $1.2 billion, compared with the same period last year, according to an NPDTechworld report.

Thanksgiving has traditionally been regarded as the official start of the holiday selling period, and this year's double-digit sales surge — reflected in record-breaking volume for Best Buy and Circuit City — was comforting to CE dealers unsure of the season's outcome.

The sales gains, led by MP3 players, digital cameras, LCD monitors and multifunction printers, came at a price however. NPDTechworld noted that price-oriented promotions were offered across all hot categories, and that pricing was especially aggressive for such high-visibility products as DVD players, color TVs, desktop PCs and scanners.

Indeed, deep door-buster discounts on Black Friday drew crowds that turned unruly at a number of Wal-Mart locations, as consumers clamored for such limited-time sale items as a $98 DVD-VCR combo unit.

CE's strength was also confirmed by the Commerce Department, which reported a 5.0 percent sales gain year-over-year for electronics and appliance stores in November.

But despite the initial buying frenzy, some CE chains are predicting flat sales for the season, which analysts expect will be the weakest for retail overall since the 1991 recession. Chain-store sales already faltered during the first week of December, falling 2.3 percent from the prior week and 2.0 percent from the year-ago period, according to Bank of Tokyo-Mitsubishi and UBS Warburg's Weekly Chain Store Sales Snapshot, an index of results from Kmart, Sears, Target, Wal-Mart and other full-line retailers.

"It's beginning to look a lot like Christmas … but unfortunately, right now, it is looking a lot like Christmas 2000 — which was a dismal season," noted Bank of Tokyo-Mitsubishi analyst Michael Niemira, who cited CE among the better performing categories that week.

The biggest gains in unit volume during Thanksgiving week were enjoyed by LCD monitors, up 163 percent over the comparable period last year, NPDTechworld reported, followed by MP3 players, up 148 percent, and multifunction printers, up 130 percent.

The biggest drops in average selling price (ASP) belonged to color TVs, which went from $445 last year to $388 last month; multifunction printers, whose ASP fell from $242 to $194; and notebook PCs, which dropped from $1,334 to $1,242.

By contrast, categories with higher ASPs included digital cameras, which went from $230 in 2001 to $252 last month, and camcorders, whose ASP rose from $384 to $394.