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CE Retail Sales Fell 5% In '09: NPD

2/10/2010 12:13:39 PM Eastern

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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