GfK Temax report: CE and IT paint a grim picture for retailers

The state of consumer electronics and appliance retail has been brought into relief with the release of the GfK Temax report for the third quarter of 2012. The quarterly report – which tracks trends and spending in the Australian Technical Consumer Goods (TCG) retail industry – makes for sobering reading, with market value down 11 per cent year-on-year, the largest drop since Q4 2010.

Consumer electronics was one of the worst performing categories, showing a 28 per cent value decline compared to the same period last year. Although there was a ray of hope in sales of headphones, the decline was driven largely by the TV segment of the market.

While the value decline in panels has long been a concern for retailers and suppliers, according to the GfK Temax report, the industry is now also facing a drop in unit sales – the one factor that has hitherto been a saving grace for the category.

“The decline in units is now so significant, as the market finds its new, ‘natural’ size, that even slight increases in overall average price have very little impact on the value of the segment,” the report read.

The IT sector also slipped during the third quarter, showing double-digit decline for the first time since GfK first produced its Temax report in 2008. Though GfK noted the positive effects of increased tablet and touch-screen PC adoption, these new products have not been enough to mitigate slipping category value and declines in ASPs.

“This declining average price is a result of both general price erosion, and more significantly, by the changing structure of the sector: unit sales of media tablets exceeded sales of notebook PCs for the first time in Q3,” the report read.

Considering the spate of smartphone releases in recent months,one of the surprises to come out of the Temax report was the stagnation of the telecommunications category. Alongside CE and IT, telco products are still one of the highest value sectors in electrical retail, but they only saw a 0.1 per cent value increase during the quarter.

GfK noted that this category has “a significant impact on overall market trends” but that the market had remained flat after a significant (albeit “brief”) period of growth. In addition, it was the increasing availability of higher-end smartphones that disguised a drop in unit sales – while value was flat, unit sales saw double-digit decline.

But it was not all bad news for retailers, with small appliances proving to be a stronger category in terms of value growth.

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