Robust sales of electronics are reviving the retail market this holiday season as US consumers rush to find bargains, especially on flat-panel TV sets,according to America's Research Group. ARG has accordingly revised its retail holiday forecast upward to -1.2% growth, up from the -2.9% it had forecast in early November.
High Demand for Electronics
For the first time in 25 years, holiday spending on electronics is virtually tied with spending on toys: 30.0% of US consumers say the gift item they are buying most is electronics, while 30.8% say toys. Last year, only 23.7% of consumers cited electronics, while 33.8% cited toys.
"Electronics sales, especially flat-panel TV sets, are flying out the door this Christmas season, "said C. Britt Beemer, CEO and founder of ARG. "When flat panel TV sets hit the magic $499 price point, sales go up like a rocket. Twenty years ago, the same thing happened with VCRs when they hit the $249 price point."
Consumers are also buying apparel this year:
- 17.1% say they are buying children's clothing this year.
- 37.6% say they are buying winter apparel for themselves, compared with 23.0% in 2008.
- 68.6% say they are buying winter apparel as gifts, compared with 43.1% last year.
In contrast, the sales of gift cards are weak this season: 49% of consumers have bought them so far, down from 53% last year. Sales of videogames slowed to 15.6% of purchases.
Online shopping is down this year to 34.3% of purchases, from 41.3% last year.
Consumers Hold Out for Discounts