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Positive signals for UK Consumer Electronics market in 2008 (16/4/2008)

At the start of 2008, there were very positive signals about the continuing success of Consumer Electronics. The uncertainty of the first three weeks of December was quickly forgotten as a very strong performance in the post Christmas sales period meant that turnover for the whole year reached £8.9 million, representing an increase of 7.6% over 2006 according to GfK.

Not for the first time, it seemed that sales of TVs knew no bounds, as the already impressive total registered in 2006 (just over 7 million), itself an all time record, was effortlessly surpassed as 8.8 million products were sold in 2007. However, it seems inconceivable that there will be a further increase of more than 22% in 2008 (or 15% in value) which was the principal contributor to the CE market's overall wellbeing last year.

An up to date indication of this slowdown comes from the latest weekly data. The value comparison for total CE reveals a stable UK market at best with some weeks actually lower than their 2007 equivalent. This disquieting trend is confirmed by sales of LCD TVs. There is a marked difference between the first six weeks of the year, with sales always up by at least 35%, and the most recent four weeks' data, whose growth averaged out below 20%.

If nothing else, this more cautious trend should reinforce manufacturers' and retailers' conviction that the strength of CE lies in the range of products at their disposal. A case in point is the Audio Systems market, which grew by more in January (12% in volume and 10% in value) than at any time during 2007. This is not simply due to the packaging of Home Theatre Systems with DVDs, but also to the increased importance of DAB products, which in January accounted for more than 30% of all Mini and Micro Systems sold.

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