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TMCNet:  TV buyers are going with smaller screens to save money [The Indianapolis Star]

[November 07, 2009]

TV buyers are going with smaller screens to save money [The Indianapolis Star]

(Indianapolis Star (IN) Via Acquire Media NewsEdge) Nov. 7--Television set sellers Best Buy and hhgregg say bargain-hunters have started a trend.

They're buying smaller screens to save a few hundred bucks.

In quarterly reports, Indianapolis-based hhgregg and Minneapolis-based Best Buy noted drops in the average price of purchases.

"The selling prices remain sharply lower," with consumers "trading down in screen size," hhgregg CEO and President Dennis May told analysts this week.

The retailers say sales remained steady as more customers went after LEDs -- light-emitting diodes, one of the latest things to improve picture quality.

Anthony Chukumba, an analyst with New York-based FTN Equity Capital Markets Corp., studies TV and appliance sales. He agreed that the recession brought out bargain-hunters, but the number of homes adding flat-screen TVs has increased so much in recent years that some shoppers may be looking to augment their primary home entertainment.

"People who are buying TVs may be on their second set," Chukumba said.

Shoppers also might find the quality of a 32-inch digital TV good enough to bypass the bigger, higher-priced screens.

"I think that's absolutely correct," said Michael Hicks, director of Ball State University's Center for Business and Economic Research. "Also, the stores are beginning sales earlier (in the holiday season), which will reduce per-unit profits." Deep price cuts may lure consumers into retailers this holiday season, the Muncie research center reported this week, but holiday sales are still expected to fall 0.93 percent from last year.

The result? Total retail sales will be worse than in any of the past five years. Consumer electronics, including TVs, could be down 14.3 percent over last year, Hicks said.

Call Star reporter Tom Spalding at (317) 444-6202.

To see more of the Indianapolis Star or to subscribe to the newspaper, go to http://www.indystar.com/.

Copyright (c) 2009, The Indianapolis Star Distributed by McClatchy-Tribune Information Services.

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