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CE Holiday Sales Down 7%: NPD

Port Washington, N.Y. – CE retail sales fell 7 percent to $13.7 billion during the holiday period of Nov. 18-Dec. 22, The NPD Group reported.

The data exclude sales of mobile phones, Amazon Kindle products, iPad, video games and Microsoft’s Surface computers.

Most CE categories tracked by NPD struggled, the market research firm said, although TVs and notebook computers each enjoyed sales in excess of $2 billion.

No other single segment accounted for more than $1 billion in revenue.

Within TV, flat-panel unit volume dipped 1.5 percent and average selling prices (ASPs) fell more than 8 percent to a record low of $364. Large-screen TVs continued their impressive growth and helped drive the category, but much of it at the expense of the once-dominant 40-inch to 49-inch segment, NPD said.

Specifically, sales of 50-inch and larger displays grew 46 percent in units and 19 percent in revenue, while the 40- to 49-inch segment fell 29 percent in units and 36 percent in revenue.

The sub-40-inch segment also performed well, accounting for 64 percent of all units sold on strong demand for 32-inch and 39-inch models.  Sales of TVs smaller than 30 inches, however, declined 24 percent.

Within PCs, NPD said the much-anticipated launch of Windows 8 did little to boost holiday sales or improve the year-long Windows notebook sales decline. Windows notebook holiday unit sales dropped 11 percent, on par with Black Friday and similar to the year-long trend, although revenue further weakened after Thanksgiving weekend to end the holiday period down 10.5 percent in revenue. A $2 increase in ASPs, to $420, did little to lift sales volume.

Touchscreen notebooks comprised 4.5 percent of Windows 8 sales, with ASPs around $700.  Sales of Windows notebooks less than $500 fell by 16 percent, while notebooks priced more than $500 increased 4 percent.

Sales of MacBooks dropped 6 percent while ASPs rose nearly $100, to $1,419.

“Consumer electronics remain trapped in a weak product cycle,” observed NPD industry analysis VP Stephen Baker. “Despite undeniable success in segments like soundbars, headphones with microphones, interchangeable-lens cameras, cellular accessories and tablets, the inability of the CE market to find substantial new pockets of revenue looms menacingly over the industry’s future.”

NPD echoed other holiday sales reports that indicated a strong start to the season over the Thanksgiving/Black Friday/Cyber Monday period, and then a drop-off in business through late December.

“For the third consecutive year sales trends worsened in the later part of the holiday season,” Baker said. “The hyped-up promotion of Black Friday, Cyber Monday and now Thanksgiving Day has proven remarkably effective in moving sales into the early part of the holiday season.  Trends like online shopping and self-gifting have intensified the focus on the more event-driven early part of the holiday season.” 

Industry observers have also attributed the downturn to concerns over the then looming “fiscal cliff,” the school shootings in Connecticut, and the lingering impact of Hurricane Sandy.

Separately, ComScore reported that total e-commerce sales for all of November and December rose 14 percent year over year to $42.3 billion. Growth was on par with 2011, but less than the 16 percent gains initially projected by the market research group.

Like NPD, ComScore indicated a strong start to the holiday season over the extended Thanksgiving weekend. But after that, “consumers almost immediately pulled back on spending,” observed chairman Gian Fulgoni, and growth rates softened through December.

“While it is typical to see growth rates subside slightly during the week after Thanksgiving, the amplified and sustained lull this year came as something of a surprise,” he said.

Cyber Monday (Nov. 26) was the biggest single online spending day of the holiday season and all of 2012, with a take of $1.5 billion. The second busiest day for e-tailers was Tuesday, Dec. 4, when online shoppers spent $1.4 billion, ComScore said.

On a weekly basis, Dec. 16-22 generated the most sales of the season ($7 billion), while Dec. 23-29 saw the greatest year-over-year sales growth (53 percent), albeit on a smaller haul of $4.3 billion.