Anyone know these people?Super Bowl May Spur Fewer TV Sales as Retailers Fight Slump
By Chris Burrit, Bloomberg - January 30, 2009
With her new 46-inch flat-panel television mounted above the fireplace, Theresa Nelson
is ready for the big game.“I wanted a new TV before the Super Bowl,” said Nelson, a 45-year-old brewery engineer at MillerCoors LLC. She paid $1,499 for the Samsung Electronics Co. TV at the Best Buy in Greensboro, North Carolina. The TV, which replaced her 10-year-old set, was $600 off and better than Circuit City’s price, she said.
Best Buy Co., Wal-Mart Stores Inc. and bankrupt Circuit City Stores Inc. are making a last push to sell as many TVs as possible before the Feb. 1 National Football League title game between the Pittsburgh Steelers and Arizona Cardinals. Faced with the worst U.S. job market in almost 16 years and plummeting home prices, fewer people may buy new TVs to watch the game even as retailers offer deep discounts and interest-free loans.
“People are saying, ‘I want to see the Super Bowl in high definition,’” Gary Severson, senior vice president of home entertainment at Wal-Mart, said in a Jan. 23 telephone interview. “Customers are also looking for the best value they can find.”
The week before the Super Bowl is typically a peak for TV sales, and retailers are trying to fight off record lows in consumer confidence. Unemployment is close to a 16-year high, and home prices have fallen 25 percent on average since mid- 2006, according to the S&P/Case-Shiller 20-city index.
Even as more Americans plan to watch the Super Bowl, usually among the highest-rated broadcasts of the year, fewer will buy new TVs to view it, according to a BIGresearch survey for the Retail Advertising and Marketing Association, part of the National Retail Federation, a Washington trade group.
The online poll of 8,850 adults conducted Jan. 1 through Jan. 8 found that 2.7 percent planned to buy a new TV for the game, down from 4.1 percent in 2008. An estimated 167 million adults may tune in to General Electric Co.’s NBC on Sunday, 9 million more than last year. They’ll spend $9.6 billion for the game, most of it on food and drink, the survey found.
U.S. flat-panel TV sales rose 25 percent to 16.3 million last year, according to NPD Group Inc., a market research firm based in Port Washington, New York. Growth slowed from a 59 percent increase in 2007, signaling that “market saturation and the economy” are eroding demand, said Stephen Baker, a consumer-electronics analyst for NPD.
Retailers in the U.S. sell more TVs during December and January because of the holidays and the Super Bowl, said Baker, who is based in Herndon, Virginia. Stores offer markdowns the week before the big game to exploit the surge, he said.
Newspaper circulars this week showed five discounted flat- panel TVs from Wal-Mart and six from Target Corp., plus price cuts on 11 sets in the first three pages of Best Buy’s flier. Among 39 flat-panel TVs displayed on the back wall of Wal-Mart’s store in Greensboro, 23 are discounted with “rollback” prices.
“This is the big event that causes them to purchase,” Josh Will, Best Buy’s vice president of televisions, said in a Jan. 28 telephone interview. He wouldn’t disclose January sales. “There’s not a huge urgency in February or March.”
Best Buy has outpaced Wal-Mart on the New York Stock Exchange since Nov. 10, when Circuit City, once the No. 2 U.S. electronics chain, sought bankruptcy protection. Richfield, Minnesota-based Best Buy has climbed 16 percent since then, while Wal-Mart has dropped 13 percent.
“I’m thinking big,” said Wal-Mart customer Tim Overby
as he eyed a 42-inch flat-panel TV from Royal Philips Electronics NV. The set is marked down to $798 from $998 this week.“I want to feel like I’m in the movie theater,” said Overby, 36, who was buying cleaning supplies Jan. 23 for his Greensboro tax-preparation service.
Free InstallationThis month Best Buy offered free home installation of flat- panel TVs costing $999 or more “with the Super Bowl in mind,” said Doc Gower, home-theater manager in the Greensboro store.
The average price of a 42-inch plasma flat-panel TV was $902 last year, down from $1,181 in 2007 and $1,706 in 2006, according to NPD. Liquid crystal display TVs of the same size cost $982 last year on average, down 42 percent from $1,693 two years ago.
Wal-Mart, based in Bentonville, Arkansas, increased marketing and cut prices of consumer electronics this year. Its flat-panel TV sales jumped 25 percent the first weekend of January from a year earlier, Chief Executive Officer H. Lee Scott told the National Retail Federation’s annual conference in New York on Jan. 12. The company won’t comment on sales since then, Severson said.
In Greensboro, Overby said he may not be able to watch the game because of his second job as a machine operator at a Tyco International Ltd. factory. Still, he scoured newspaper circulars from Wal-Mart, Best Buy and Circuit City, which is liquidating, for the cheapest price for a big TV.
“Any way I can save money, I’m going to save money.”http://www.bloomberg.com/apps/news?p...efer=exclusive