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Santa Said: Merry Christmas CE Retail

NEW YORK – File this under “If We Cover CE Retail Long Enough”: Electronics and appliances dealers turned out to be the saviors of the holiday selling season.

Buried within a U.S. Census Bureau report showing disappointing retail sales in December was a beacon of positivity for a long-ailing industry – CE/majap sellthrough rose 6.8 percent year over year to $9 billion last month, outperforming all distribution channels, save for food and cars.

Fueling the good cheer were aggressive majap promotions and strong demand for 4K TVs and phablets, with the latter displacing tablets as a holiday bestseller. Also dethroned was video gaming, following the prior-year debuts of the PlayStation4 and Xbox One platforms, while wearables, the much anticipated stocking stuffer, drew mixed reviews from dealers.

Still, the results bested furniture stores, which were up 5.8 percent; online-only retailers, whose sales were up a more modest 5.1 percent, curtailed by Christmas delivery cut-off dates; and the total retail market (excluding restaurants and auto), which was up a scant 2.6 percent for the month adjusted for calendar changes.

But all channels appeared to be impacted by pre- Black Friday discounting, which pulled demand forward into November. Indeed, December CE/majap sales slipped 1.6 percent month over month, while total retail sales were up a more reasonable 4 percent (unadjusted) for November and December combined.

Here’s how individual CE/majap retailers fared over the holidays:

Best Buy: For the nine weeks, ended Jan. 4, U.S. revenue rose more than 4 percent to $10.1 billion, with comp sales increasing 3.4 percent — including a 0.8 percent lift from mobile carriers’ new installment billing plans — vs. a year-ago gain of 0.9 percent, and online comps up 13.4 percent. Best Buy president/CEO Hubert Joly attributed the holiday gains to the “favorable macroeconomic environment” and sales of largescreen TVs and higher-priced mobile phones, which helped offset declines in tablets and services.

hhgregg: Net and comp sales both declined about 6 percent for the three months, ended Dec. 31, amid sharply lower computer and tablet sell-through, the company reported. CE comps slipped about 4 percent; majap comps were relatively flat; and comps for home products, which include bedding and furniture, fell by about 9 percent.

But the biggest decrease came in the computer and tablet category, where comps dropped 35 percent due to “declining consumer demand” and the company’s exit from “certain areas of the business that were unprofitable,” president/CEO Dennis May said.

Conn’s: Total retail net sales rose 11.5 percent in December to $132.4 million, but comp-store sales were flattened by plummeting tablet demand. Nevertheless, CE (and majap comps) increased 7.5 percent, with higher average selling prices (ASPs) for electronics more than offsetting declines in unit volume.

TV comps were “up slightly,” reported chairman/ CEO Theo Wright, and Ultra HD models comprised more than half (51.1 percent) of all TV sales.

RadioShack: The on-the-ropes retailer didn’t share its holiday results, although published reports suggest that it’s looking to sell some of its store leases to Sprint and that a bankruptcy filing is imminent.

So what lies ahead? Despite a tempered forecast from Best Buy, analysts expect the holiday momentum to continue into 2015, buoyed by the improving job and housing markets and the dramatic drop in gas prices. As National Retail Federation president Matthew Shay observed: “There is every reason to believe that we have moved well beyond the days of consumer pessimism and that the trajectory for retailers continues to point up.”