Not So Blue Christmas for Electronics Sales: Trade Group

While spending on consumer electronics won’t see the same sales jump it did during last holiday season, the sector will still experience year-end growth, according to an annual survey from the Consumer Electronics Association.

The trade group’s 15th annual CE Holiday Purchase Pattern Study found that consumer electronics sales should grow 3.5% in fourth-quarter 2008—about half the year-over-year growth seen in 2007, but still not bad in a down economy.

The survey found that while consumers plan to spend about $200 less on average this holiday season, they will allot more of that budget to consumer electronics. Consumers say they will spend about $1,437 on all holiday-related costs this year, from food and decorations to gifts; and they told the CEA they will spend 28% of that budget on consumer electronics, up 6% from spending at the end of 2007.

The study found that electronic gadgets make up four of the top 10 items on adults’ holiday wish lists, with computers at number two and TVs, video game systems and cell phones also in the top spots. Global peace and happiness ranked number one, as usual.

Almost 80% of adults and 84% of teens said they want to get a gift of consumer electronics this year, up 4 and 8 percentage points respectively from last year’s study. Teens’ most wanted gifts this year are computers, video games, MP3 players and mobile phones.

Among items consumers said they plan to give, video game consoles topped the list, followed by digital cameras, MP3 players and DVD players.

According to the CEA, consumer holiday buying will be affected by the extent to which electronics have infiltrated every aspect of daily life.

“With the recession in the early 1990s and the burst of the dot-com bubble, consumers spent less of their discretionary income on consumer electronics,” said Shawn DuBravac, CEA economist, in a statement. “However, there has been a change in sentiment as consumers now view [consumer electronics] as a necessity rather than a luxury.”

As for how they plan to pay for these wish-list wants, two thirds of respondents told the CEA they will use coupons and spend more time shopping for bargains than they did last year. Half also say they will use only cash for gifts this year, although four in ten said they will pay for their presents with some form of credit.

The CEA study was conducted between Sept. 25 and Sept. 28.