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May Sales Fell 13% For CE/Majap Stores

Washington — Sales at consumer electronics and appliance specialty chains fell 13 percent last month from their year-ago levels, according to the U.S. Commerce Department’s latest monthly tally.

The downturn follows an 11 percent drop in April sales year over year, and exceeded the 9.6 percent decline in total retail sales in May.

Viewed on a monthly basis, however, the rate of decline has slowed for CE and majap chains, with May sales slipping 0.5 percent from April, and April sales decreasing 0.9 percent from March, the government report shows.

In contrast, total retail sales rose 0.5 percent from April.

The sales estimates were adjusted for seasonal variations and holiday and trading-day differences, but not for price changes.

Analysts attributed the comp declines to the departure of Circuit City, which was included in last year’s figures, and the absence of government stimulus checks, which helped boost consumer spending last spring. “With no direct stimulus for consumers this year, retailers were left with tougher comparisons, making May retail sales appear weak,” said Rosalind Wells, chief economist for the National Retail Federation, a trade association. “However, a slight sales increase from April provides hope that the economic turnaround may not be that far off.”

But retailers looking for a sales spike for Father’s Day may be disappointed. According to market research firm IBISWorld, total spending for dads is expected to fall 7.7 percent this holiday to $9 billion, while CE purchases in particular are projected to fall 16.3 percent to $1.1 billion from Father’s Day 2008.

“Traditional Father’s Day gifts, such as tools and electronics, are declining this year while spa services, personal care products and greeting cards are increasing,” observed Toon van Beeck, senior analyst with IBISWorld.  “It seems that ‘New Age’ dads are this year’s fad.”

That won’t stop Walmart from mounting aggressive Father’s Day price promotions starting this Sunday on select CE, including a Magnavox Blu-ray Disc player (model NB500MGX) for $128 and a two-for-$20 Blu-ray movie bundle offer.

Walmart will also be the first retailer besides Dell to carry the company’s Studio One 19 touch-screen desktop computer next week, for $848.

Other Walmart promotions will include:

  • a 52-inch Sony Bravia 1080p LCD (model KDL-52S5100) for $1,788;
  • a 42-inch Vizio 1080p LCD (model VO420E) for $697;
  • a Dell Inspiron Black notebook computer for $398;
  • a PS3 (80GB) bundle including “Quantum of Solace” on Blu-ray Disc and “MLB ’09: The Show” for $399;
  • the Palm Pre smartphone at select stores with qualifying contract and no mail-in rebate for $199; and
  • the Garmin Nuvi 250 with 3.5-inch touchscreen for $128.