Analysts: Economic Woes 'May' Lead to Slow HD Sales

From HD Notebook

Despite some headlines recently that the pitiful economy is having an adverse effect on sales of electronics, notably HD products, all the evidence so far is rather circumstantial. The key term in most surveys on the issue is that sales "may" slow down based on past scenarios (not that much else can really compare to this month's highly eventful Wall Street fits and starts).

Having said that, the economy may be showing some early (albeit vague) signs of lessening HD and other CE purchases this fall, according to a few analysts. One analyst told the Wall Street Journal this week that a slowdown in purchases of HD sets "appears to have emerged" in the wake of Wall Street's crazy October.

Viewing the purchase of a new HD television set as purely a "discretionary luxury" buy (an arguable point these days, especially if your primary set, maybe a stubborn 15-year-old Sony Trinitron, finally calls it quits), the analyst firm Sanford Bernstein & Co. thinks it sees some trouble starting to rear its ugly head by gauging a MasterCard service known as SpendingPulse. The credit card firm's stats point to a drop in electronics spending of about 14 percent last month, compared to September 2007. (Declines in July and August of this year averaged about 4.5 percent.)

Sanford Bernstein analyst Craig Moffett said "it is not a coincidence" that signs of a likely downturn in HD sales started in mid-September when such Wall Street stalwarts as Lehman Brothers began to go under. "Consumers are justifiably scared," Moffett told the Journal.

Relatively high price points (at least until recently) and previous economic hurdles have usually not had an adverse effect on HD sales, despite dire warnings to the contrary. However, both retailers and manufacturers are holding their breath for the upcoming holidays, hoping that HD and other electronics will be exempt from what could be an unusually slow sales season.