Looming interest rate rises and a fragile global economy could keep consumers from purchasing big ticket items in 2010, according to GfK. The analyst group also predicts the lack of Government cash stimulus packages could prevent retailers from chalking up similar sales to this time last year.
The forecast comes off the back of GfK’s latest Temax figures on retail ICT sales. It reported sales over the last quarter of 2009 were up 4 per cent year-on-year. Notebooks and flat panel TVs were still on top of the shopping list for consumers in the last quarter of 2009.
For the first time, average price of notebook sale dipped below $1000 due to competitive retail promotions. Notebook sales in the last quarter were also up 20 per cent in comparison to the same time last year.
GfK highlighted the release of Windows 7 and a growing demand for digital devices as major contributors towards notebook sales.
In contrast, LCD and plasma TVs increased in value by 14 per cent, GfK found. Bonus consumer incentives were the main drivers behind most of the uplift in the LCD and plasma TV sector. More than 75,000 Blu-ray home theatre systems, DVD recorders, game consoles and bonus TVs were given away by manufacturers to help boost sales in retail stores during October and November.
In the mobile sector, GfK highlighted a market divide between pre-paid mobile devices and smartphones. Pre-paid mobile handset market declined by further 8 per cent. The smartphone sector constituted 51 per cent of handset sales based on value.
In total, spending on technical consumer goods reached $19.4 billion in the retail sector in 2009, rising 7.1 per cent compared to the previous year.
Consumer confidence is expected to continue to grow during 2010 in the retail sector with new technologies becoming more affordable and the possible decline of unemployment figures, GfK said.
“There are certainly signs that consumers will continue to grow in confidence and continue their increased levels of spending in the first quarter of 2010,” the report stated.
“However, the global economy is still fragile, and another expected rise in interest rates could lead some consumers to defer large purchases to later in the year. Furthermore, a lack of government cash stimulus packages in the first six months of the year will impede retailers efforts to create the same growth rates that were seen at the start of 2009.”