By Mark Davidson
Sales of electrical goods will continue to fall in 2011 as the wave of exciting new products comes to an end, according to independent analyst Verdict Research.
Verdict said the market will contract by 0.9 per cent by the end of the year, making the sector will be one of the worst performers in retail.
The report suggests that unemployment, customer confidence, lower disposable income, a lack of new technology and a weak property market have contributed to the slump in the electricals sector.
Recent results prove the study is accurate, with Dixons Group, the owner of Currys, PC World and Dixons.co.uk, recently announcing an annual like-for-like (LFL) sales declines of five per cent for the 12 weeks to January 8th.
And Kesa-owned Comet has also suffered, with poor Christmas sales resulting in a 7.3 per cent fall in LFL trading compared to last year.
Matt Piner, Senior Analyst at Verdict, commented: “Up until 2007 the electricals market was doing well, driven by a raft of new technology including flatscreen TVs, digital cameras and laptops.
“There was also a surge in the popularity of gaming brought about by third generation consoles such as the Xbox 360 and Nintendo Wii.
“However there has since been a drought in new technology, which has severely impacted the market. This isn’t a consequence of the recession alone.”
Piner said there may be hope on the horizon with the introduction of 3D technology, which is becoming increasingly prevalent on retailers’ shelves.
He believes the technology will breathe new life into sales of games consoles, laptops and cameras, although he admits it will not be enough to completely turn around the sector’s fortunes.