Consumers still spending on gadgets

updated 11:38 a.m. ET Dec. 19, 2007

NEW YORK - Retail slowdown aside, people are still shopping for consumer electronics this holiday season, and growth in the field could be double the growth in retail overall.

Among the best-selling categories are global positioning systems, laptops and video games.

Market researcher NPD Group said Tuesday Americans spent $4.5 billion on electronic gadgets between Nov. 18 and Dec. 9. This is half a percent lower than last year's figure, but NPD analyst Stephen Baker said everything is "pretty much on track to what we expected it to be."

Global positioning systems were the fastest-growing category, followed by digital picture frames. People also bought more laptop computers and digital SLR cameras, but they spent less on point-and-shoot digicams and MP3 players. And while sales of LCD TVs grew, people bought fewer plasma TV sets — which are generally available in bigger sizes.

"There is clearly a lot of interest in electronics," Baker said. "And people are willing to spend on what they want."

Instead of spending less on electronics, people are cutting back on extras like travel and some household purchases such as decorations, said Tim Herbert, senior director of market research at Consumer Electronics Association.

But while electronics sales overall are solid, they are growing slower than in past years. In October, the CEA forecast 7 percent growth in factory-to-retail sales of consumer electronics in the fourth quarter, and so far this seems to be holding up, said Tim Herbert, senior director of market research at Consumer Electronics Association. This is still better than the 4 percent overall retail growth forecast by the National Retail Federation. But it's slower than last year's 16 percent growth rate.

NPD, which tracks video game sales separately from consumer electronics, said last week that sales of consoles, games and accessories hit $2.63 billion in November, up 52 percent from last year.

And with "the biggest month of the year yet to go, total industry sales are on track to achieve between $18 billion and $19 billion in the U.S.," said NPD video game analyst Anita Frazier in an e-mail.

Retailers like Best Buy Co. are benefiting from solid holiday sales. The country's largest electronics retailer posted a 52 percent jump in its third-quarter earnings, earlier Tuesday, beating Wall Street's expectations. Video game consoles and personal navigation devices fueled the quarter's results, along with an extra week of holiday shopping.

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