CE Execs See Fall Growth - Twice

CE Execs See Fall Growth

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If you are a supplier to both Brand Source and the Nationwide Marketing Group (or a member of TWICE’s staff) you could have attended almost back-to-back summer conventions in Las Vegas last month. What you picked up on those trips, plus info from this week’s CEDIA Expo in Denver, would give you a good feel for how the fall selling season may turn out.

From what we’ve seen and heard, CE is performing better than the gloomy general economy, but major appliances and custom installation sales continue to take a hit.

Of course buying groups always like to spin positively at their conventions, so it was refreshing to hear the candor from both Nationwide and BrandSource executives who admitted that for their members in certain parts of the country (California, Nevada, Florida and parts of the Midwest being most notable), business is soft due to the usual suspects — energy costs, the housing crisis and the credit crunch.

But CE sales, led by HDTV, are strong and should remain so for the balance of 2008 and into next year. Several industry execs we spoke to agreed with the view of Nationwide executive VP Robert Weisner, who said that, like previous economic slowdowns, consumers will cut back on vacations and the like but they "will spend money on the entertainment room."

Financial analysts in previous downturns discounted such talk. But an iSuppli report issued last week backs this opinion.

What has given the CE business an extra boost this year, and will for the remainder of the year, is next February’s digital TV transition deadline. As the days tick by more and more consumers are becoming aware of it, giving retailers and suppliers an extra bit of comfort despite the sluggish economy.

Those who are weathering the economic storm, have good credit and have not defaulted on their mortgages seem to be spending enough on CE products to make retailers and suppliers feel good about business.

As for major appliances and the custom installation markets, much of their growth over the past decade had come from the housing boom. Since that bubble burst, the two buying groups report that majap sales are mixed, again on a regional basis.

The problems in housing and credit should be taking a bite out of the custom installation market, but so far CEDIA is saying that there is single-digit growth for the industry on a nationwide basis. Individual installers say that most business is flat or down a few points compared with last year.

Discussions with custom installers and their suppliers in Denver over the next few days should enable everyone to gauge how the upscale part of the CE industry will perform this fall.

On the bright side, CEDIA reported that registration numbers for this week’s convention are ahead of last year and that in 2009, the Expo will move to Atlanta because it has outgrown the Denver venue.

CEDIA — and I’m sure members of the mainstream CE and major appliance industries — hopes that the growth of its annual show is a harbinger of an overall economic turnaround, if not this fall than in 2009.

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