Lower Prices On Electronics Draw Shoppers Poor Overseas Consumer Markets Good News For Americans
Holiday shoppers are getting hit by a different sort of sticker shock this year - rock-bottom prices for consumer electronics gear.
While electronics prices routinely drop, bargains this year at Best Buy, Circuit City and other major chains have plunged to levels that finally are turning some novelty items such as DVD players and digital cameras into mass-market products - while sparking strong demand for more traditional gifts such as PCs.
Manufacturers, particularly the Japanese, are slashing prices more sharply than usual this year in part because slackness in overseas consumer markets is forcing them to try to cheaply unload products in the United States.
At the same time, consumers have more reason to be comfortable about buying some relatively new gizmos. Since DVD players hit the market last year, for example, about 2,000 movie titles have been published on DVD. Digital video disks look like regular CDs but hold seven times more information and are promoted as the replacement to video tapes.
Though the jury’s still out and retailers remained cautious, some analysts were upbeat that this season will be better for electronics than last Christmas’ spotty sales, as today’s gift buyers shift from low-tech products such as clothes and books.
“Things are flying out of stores,” said David Strasser, a retail analyst with Salomon Smith Barney Inc. “You’ve got all the products that are now hitting the sweet spot on pricing.”
Among bargains at major retailers since holiday shopping formally began: VCRs as low as $80, 25 percent off last year’s price; new DVD machines for $300, down from $500; personal computers at just $700, with lots of goodies attached; a five-CD disk player for $80, down from $120 for a single-disk player.
Those sorts of prices pleasantly surprised shoppers such as Laurie Cags, who was cruising the CompUSA store in midtown Manhattan for a personal computer to help organize her building contracting business.
She was surprised by the $1,699 pricetag for a Hewlett-Packard PC, monitor and printer that’s also a scanner and fax machine. “I thought I’d have to spend a little more like $2,000 to $2,500.”
“The prices have gone way down,” said Paolo Nicosia, who was shopping at the DataVision store in Manhattan for a $100 computer device to let his three home computers share the same printer, monitor and other peripherals. It used to cost $300.
At the Best Buy chain, long lines of up to 1,000 customers greeted some stores recently, drawn by promotions for a $599 IBM PC that included a printer, and $288 DVD players that included five free movies and 13 free movie rentals.
Circuit City says its 530 stores saw strong sales for sub-$1,000 computers, digital cameras and $400 DVD players, also including movie giveaways, shortly after Thanksgiving.
Holiday shoppers have been buying wireless phones but are tending to shy away from traditional electronics such as Sony’s Walkman.
Strasser, the analyst, still believes it will be a good season overall for electronics retailers. He expected Best Buy’s holiday sales to grow by up to 15 percent, Circuit City by up to 9 percent, and Tandy by up to 6 percent.