CE chains finally pulled the trigger on TV price promotions in the last days before the Super Bowl in a final push to clear out old inventory.
While retailers generally held their fire through most of January following the margin-challenged holidays, the last days of the month and the first week of February saw another volley of price cuts that brought 42W-inch, tier-three plasma displays down to $950 (Maxent), and 40W-inch, tier-one LCD panels below $1,500 (Samsung).
As Tweeter president/CEO Joe McGuire noted last week in a conference call, "TV prices were more stable at the start of January than they were during the holidays, with a little bit of excitement the week before Super Bowl." (See story below.) His observation was born out by a TV pricing study from Goldman Sachs which showed that retails on flat-panel and microdisplay TVs at Best Buy and Circuit City together had slipped only 6 percent on average between Dec. 8 and Jan. 30.
But the playing field shifted on the eve of the Super Bowl, when advanced TVs shed prices sharply. Although Panasonic took much of the heat for the disruptive holiday season, this time other top brands took the plunge. Among the more striking price cuts: Sony's highly-touted SXRD rear-projection line, including the 50W-inch 1,080p Grand Wega, which Best Buy offered for $1,800 in an online special with free shipping. The 55W-inch model was priced at $2,025.
Other rear-projection TVs that were footballed that week included Samsung's 50W-inch 720p DLP ($1,250 online at Circuit City); JVC's 52W-inch, 1,080p HD-ILA ($1,500 at hhgregg); and Mitsubishi's 57W-inch 1,080p DLP ($2,000, also at hhgregg, whose hometown Indianapolis Colts won the championship).
Toshiba sets also hit new lows, with its 37W-inch REGZA LCD-TV/DVD combo selling for $1,498 at Abt Electronics (serving the Bears' Chicago market), while other retailers offered a $200 rebate (see story, right) on combined purchases of Toshiba's HD DVD players and HDTVs sized 42W inches and up.
Plasma price points also fell, with tier-one displays generally retailing for $1,300 in 42W-inch sizes and $1,800 for 50W-inch sets. Even Pioneer's traditionally pricey PDPs declined, with the 42W-inch PDP4216HD retailing for $1,620 at Tweeter.
Zero-percent financing also played a major role in Super Bowl promotions. David Morrish, merchandising senior VP for Best Buy, which repeated last year's 36-month offer, said the plans are important to new mass market customers who are now finding big screen TVs within their reach.
The promotions and pre-game hoopla apparently had their effect. At Abt, unit sales of TVs were up between 35 percent and 40 percent, coming mostly between the last playoff game and the Super Bowl, and supplies of HD set-top boxes and TV antennas ran dry. Unfortunately, said president Mike Abt, dollar volume was less robust, and profits were hardly there at all." Nevertheless, "Nothing drives the business like football," Abt added, "and we pray that the Bears make it next year."