GfK: Technical consumer goods spending declines but IT grew

GfK: Technical consumer goods spending declines but IT grew

Report indicates retailers are struggling to maintain value growth from sub $1000 notebook category

The lack of government stimulus and effect of four interest rate rises during the past six months have impacted money spent on technical consumer goods, according to new findings.

The GfK Temax Australia report indicated spending in Q1 this year dipped by 1.6 per cent year-on-year. This is the first decline reported in this space since the analyst group launched its Temax quarterly report in Q3 2008. The figures are directly taken from retailers’ point-of-sales systems.

But despite consumer electronics failing to deliver growth, IT and telecoms grew modestly thanks to the ‘back to school’ period.

GfK senior IT manager, Kathleen Lonergan, said January was still quite strong in terms of growth, but things slowed down over February and March.

"I don’t know if a lot of that was to do with the Government stimulus package at the start of last year, and then seeing the effect of that a year on, but the spending hasn’t been quite as high,” she said.

IT grew by 5.6 per cent during the quarter but the value of notebook sales decreased by 4.1 per cent. Sixty per cent of notebooks sold were under the $1000 price tag. The report indicated retailers were struggling to maintain value growth from this category.

By contrast, desktop PCs experienced 15 per cent growth mainly due to the popularity of all-in-one models, which made up 36 per cent of all PCs sold. According to GfK, this was due to their higher average price. Storage devices also grew by 36 per cent as well as multifunction print devices (two per cent).

High capacity hard drives were key for the storage market, with eight per cent of models sold boasting a capacity of 1.5TB or more in March, the report said. After a disappointing Q4 2009, the telecoms sector returned to growth, attracting 16 per cent of total spend. The report indicated traditional mobile handsets declined by 45 per cent, but smartphones increased by 145 per cent year-on-year.

Consumer electronics posted a year-on-year decline of 2.2 per cent this quarter. Bucking the trend was the flat panel TV category, which grew three per cent. The report pointed out consumers were benefiting from competitive pricing and attractive retail promotions.

Other consumer electronics categories which took a double-digit tumble included MP3 sales, which were impacted by the growth of smartphones with MP3 capability, GfK said.

With DVD recorders being replaced by high-definition set-top boxes with built-in hard drives, this segment also continued to decline.

The report indicated spending in Q2 2010 was unlikely to surpass Q2 2009, due to increased competitive retail pricing and promotions. However, there were some bright spots, particularly around TVs.

"With the upcoming FIFA World Cup 2010, coinciding with the take-up of new TV technologies like 3D, LED and IPTV, there is cause for optimism," GfK said. "Historically, such events have provided a strong boost to technical markets."

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Tags consumer spendingFIFA World Cup South AfricaGfK TEMAX report


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