Christmas Retail Sales Mixed
Consumer Electronics
Mon, Jan 05 1998
infoseek.com
Christmas sales closed with rush, enabling many CE retailers to post slight gains for holiday season on strength of PCs, TVs and audio components, our informal poll of merchants found. We're told that after slow start on Thanksgiving weekend, sales gained speed as retailers mixed product giveaways with financing programs in effort to boost unit sales to offset tumbling prices. Retailers said they also battled spot shortages, including high-end Mitsubishi projection TVs and Sony DSS products. "Christmas did happen, but in most parts of the country it was quite late in coming," PRO Buying Group Exec. Dir. Roger Heuberger said. In first holiday season at retail, DVD received decidedly mixed reviews. While high-end specialists catering to audio and videophiles reported strong sales, more broad-based chains said DVD had little impact on Christmas business. Bjorn's Audio/Video Buyer Darryl Wilkinson said DVD accounted for nearly 10% of retailer's Dec. sales, while Tops Appliance City COO Rick Jones said "early buy cycle" had subsided. "There was a lot of advertisement for the product on TV, but it really didn't pull it through," he said. "There was a point where we couldn't keep the combo {Pioneer} laserdisc/DVD players in stock, but now they're not a problem to keep on the shelves." Supply was tight in high-end DVD players, with several dealers reporting shortages and Heuberger saying that PRO group was "sitting on many hundreds of thousands of dollars" in back orders. TVs were promotional product du jour throughout Dec., retailers said. Wal-Mart carried Sanyo 25" at $229 and Mitsubishi lowered price on 40" direct-view to $1,999 from $2,500 after dropping promotion that offered Dolby Pro Logic receiver free with purchase of set, retailers said. Overall, TV prices fell 15%, and 50" projection that sold for $2,300-$2,500 year ago dropped well below $2,000. Also falling in promotional camp were satellite systems, with low-end prices forming beachhead in $149-$199 range. Sales, also driven by lower installation costs, were up significantly from year ago, retailers said. "The prices are attractive and we don't have any complicated rebates any more so all the customer has to do is buy it," said Montgomery Ward Electric Ave. Senior Vp Robert Baird. Audio products, which had been slow movers for much of 1997, staged mini comeback in holiday season, due in part to interest in home theater systems, retailers said. Components, speakers and shelf systems all benefited from improved "attachment rates" that linked systems. On downside, camcorders posted disappointing results despite manufacturers' moves in Nov. to cut retail prices $100. "Everybody took their prices down $100 in Nov. and I'm not sure we sold enough units to make up for the decrease," Baird said. "When you lose 15-20% of your retail price, you have to sell 15-20% more, and we didn't do that." Consumers were buying PCs in mass quantities, although retailers struggled to offset average selling prices that fell as much as $500 in some cases. Sub-$1,000 PCs topped many consumers' lists in accounting for up to 40% of PC sales for holiday, analysts said. To sweeten pot, several retailers offered $999 PC with free printer or monitor and some cut Compaq Presario 2200 CPU to $749. "The compression really hurts because the business you were doing at $1,500 this year, you were doing at $2,000 last year," Campo Electronics Senior Vp Malcolm Ballinger said. Among those reporting last week, CompUSA said sales rose 22% to $1.46 billion for 2nd quarter ended Dec. 27 from $1.2 billion year ago on 8% gain in same-store sales. Many analysts had projected 6% increase in same-store sales. CompUSA CEO James Halpin said demand was strong for sub-$1,000 PCs and advanced systems above $2,200, while software sales were led by Broderbund's Riven and Intuit's Quicken.
(Copyright 1998 by Warren Publishing, Inc.) |
