Port Washington, N.Y. - Retail sales of consumer electronics fell nearly 5 percent to $106 billion last year, The NPD Group reported.

The decline was attributed to lower average selling prices and relatively flat unit volume.
According to the market research firm's Consumer Tracking Service, CE price points fell by an average of 6 percent in 2009 while unit sales increased only marginally, to over 1 billion devices industrywide. The sales data excludes video game hardware and software, PC software and mobile phones.

"The industry lost ground this year but in light of the overall economic conditions it was a performance that could have been much worse," said industry analysis VP Stephen Baker.

Sales trends improved as the year progressed, culminating in a 1.5 percent decline in the fourth quarter, compared with a 7 percent drop during the last three months of 2008.

The 1.5-percent decline represented the best quarterly performance since the second quarter of 2008, and accounted for almost 32 percent of total CE revenue in 2009.

 Brick-and-mortar retailers increased their CE market share for the fourth consecutive year, propelled by two-point share gains in computers and TVs. Best Buy once again sold the most CE in 2009 and gained more revenue share than any other retailer. Joining it in the top-five tier was Walmart, Staples, Target and Apple's retail store chain, NPD said.

 In contrast, Dell led in online CE sales, followed by Amazon.com, Best Buy, Hewlett-Packard and Apple, although online-only non-vendor e-tailers had the best showing, with sales up 9 percent for that channel.

Consumer spending varied by income bracket, with middle-income consumers cutting back the most. Spending among those with incomes between $30,000 and $100,000 declined almost 8 percent from 2008, while lower-income consumers decreased their CE spending by 3 percent. Those with incomes over $100,000 reigned in their CE expenditures by just over 1 percent.

Consumers paid an average of $92 for each CE item purchased, NPD said.
Baker said that an important success story to remember in such a dismal year is that retailers and manufacturers kept the consumer engaged and shopping by being aggressive on CE pricing. "Categories like computers and flat-panel TVs, despite very high selling prices, were able to see significant increases in unit volume through this tactic," he said.

Aside from tough year-over-year comparisons, Baker said the uptick in fourth quarter sales was also due to strong sales of PCs and TVs, which points to increased momentum in 2010.
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Abstract Web: 
Port Washington, N.Y. - Retail sales of consumer electronics fell nearly 5 percent to $106 billion last year, The NPD Group reported.
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