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Demand for TVs are up as promotions focus on bigger screen size and lower price
NEW YORK (AP) ' In an unexpected twist, TVs are topping many Christmas shopping lists this year.
Wal-Mart says TVs are among the top gifts people are putting on layaway at its 3,000-plus U.S. stores during the holiday season. The Westinghouse 46-inch LCD HDTV that was on sale for half off at Target for $298 was a top seller during the start to the season last weekend. And Abt Electronics already has sold out of 55-inch Samsung LED TVs that were marked down by half to $1099.
"You've got people clamoring to spend $1,000 on a large-screen TV," says Jon Abt, owner of Glenville, Ill.-based Abt, where sales of TVs are up 15 percent over a year ago.
Heading into the holiday shopping season, TVs seemed so two Christmases ago. Sales had slowed as consumers tightened their budgets in the weak economy and technologies like 3D failed to spark their interest the way tablet computers and smartphones have. But now shoppers are responding to the discounts of up to 50 percent that retailers are offering on TVs.
Most chains don't break out TV revenue, but overall unit sales are up 15 percent this year through October, according to the latest data available from research firm NPD Group Inc. That compares with a 2 percent rise during the same period in 2010. Meanwhile, prices have dropped 7 percent to an average of $597, compared with $647 last year and $734 in 2009.
Best Buy slashed a 55-inch Samsung LED TV by $400 to $1,099.99. A Sony 40-inch Internet-enabled LCD HDTV at Target is marked down by $200 to $599. And J&R Electronics in New York has a 42-inch LG LCD HDTV for $30 off the original price at $549.99.
"Great prices on TVs are a proven method of getting people into stores," says Stephen Baker, an NPD analyst.
That TVs are turning out to be a hot item gives retailers some unexpected good news during the holiday shopping season, a time when many of them make up to 40 percent of their annual revenue. They long have depended on electronics to build buzz over the holidays. (Think: smartphones last year.) And consumer electronics are expected to account for a third of all purchases over the holidays, according to the Consumer Electronics Association trade group.
But Americans rushed out to buy flat-screen TVs two years ago, so merchants weren't expecting them to be hot this season. Indeed, tablets like the iPad are expected to be the second most wanted gift this year behind clothes, while TVs didn't even make it in the top five most-desired products this holiday season, according to the trade group.
Dan de Grandpre, editor-in-chief of deal aggregator Dealnews.com, says TV sales are unexpectedly strong because consumers who'd put off buying them before the holidays suddenly are attracted to the deals. According to Dealnews.com, there were 77 major deals on TVs during the Black Friday weekend, and consumer interest in those deals rose 28 percent.
"There's pent-up demand for consumers to upgrade or buy second or third TVs," Dan de Grandpre says.
R.J. Hottovy, a Morningstar analyst, says sales on larger, more expensive 50-inch and 60-inch models are mostly driving demand. Those TVs are usually not discounted heavily, he says, especially early in the holiday shopping season.
"The 50-inch flat-screen in a $400-to-$500 price range really resonated well with consumers," Hottovoy says. "It's an attainable price point for many consumers, even in a difficult macroeconomic environment."
That's why even though Marc Siciliano didn't need a TV, he decided to buy a 42-inch LG Smart TV on Amazon.com that was marked down to $650 from $1,100. The 23-year-old from Stamford, Conn., says the deep discounts "were the icing on the cake."
Likewise, Juan Ibanez, 24, an information technology consultant in San Jose, Calif., picked up a 47-inch LED TV from Best Buy that was marked down to $630 from $999. He and his wife wanted a new TV, but hadn't expected to buy one so soon.
"The deals were definitely what made us decide to buy it now," Ibanez says.
Follow AP retail coverage at http://www.twitter.com/AP_Retail and Mae Anderson at http://www.twitter.com/Maetron..