The Consumer Electronics Association has drastically revised its holiday sales prognostications and is now predicting sales growth of only 0.1%—down from its previous estimate of 3.5% growth—compared to the 2007 holiday shopping season.
The revision was based on October product shipment data, plus a survey of shoppers on Black Friday, Nov. 28.
CEA's earlier forecast was based on shipment data, consumer surveys and economic analysis available in early October. Flat-panel TV shipment revenues in September 2008, for example, were up 32 % in terms of units shipped, and up 8% on revenue over 2007. But by the end of that month, unit shipment growth of flat-panels remained high at 22 percent but shipment revenues fell 3%, impacting the fourth quarter forecast, the association said.
According to consumer interviews, shoppers who are buying TV sets are purchasing smaller, less expensive units. They are seeking out other electronics at discount retailers.
"Although CEA certainly took price declines and weakness in consumer demand into consideration, the severity and the speed of declines in these unprecedented times caught everyone off guard. Consumer sentiment is improving, but shopper unease this holiday season is creating challenges for all sectors of the economy, including consumer electronics," said Jason Oxman, CEA's senior vice president of industry affairs.