You are here: News / First quarterly fall in consumer electronics sales since Q4 2003

Tuesday July 29th 2008

First quarterly fall in consumer electronics sales since Q4 2003

Archived article dated Tuesday July 29th 2008

After 17 consecutive quarters of growth, sales in the £9.14bn annual consumer electronics sector have shown their first fall since Q4 2003.

Sales for the second quarter of 2008 (April to June) were down -0.3% representing a loss of £5.9m to retailers. June saw the second consecutive month of decline, with sales falling by -1.7% in value. This continued the trend from May, which was the worst month for consumer electronics sales since 2004, when sales fell by -2.7%. Independent retailers have been particularly badly hit, with sales falling by -16.7% in May and -9.8% in June, reports GfK.

GfK points to sales of LCD TV and MP3/4 players as key to the quarterly decline. The LCD TV market saw little boost from Euro 2008. While sales of LCD TVs were up by 11% in June 2008, average price falls of 10% eroded away any value growth. In addition, MP3 and MP4 players saw a significant drop in sales, with volumes falling by -18% in June. James Randall, Commercial Director at GfK says: “The warm weather had a significant impact on sales of consumer electronics, with consumers switching to buying products for their gardens. However, looking at the quarter as a whole gives the clearest indication of what is happening in the market and it's not good news. The second quarter of 2008 has been poor for consumer electronics retailers and is further evidence of a softening retail market.”

The last month the total consumer electronics market was in decline was May 2004, says GfK, when it fell by 2.1% in value year-on-year. At this time, it was early days for the key products which have added so much value to consumer electronics market in recent years, namely Flat TV and MP3/4 products. In May 2004, two key markets of CRT TV and Audio Systems were declining in value with price erosion strong in areas such as widescreen CRT, micro systems and home theatre systems.

Tagged as: gfk | consumer goods |

Text size: A | A | A