As reported by GfK Temax, the final quarter of 2013 saw a market decline in general. The photo sector was the hardest hit – here, falls in value compared to the same quarter last year attacked compact system cameras and SLR cameras which had previously proved resilient to the cannibalisation of the product group from mobile and smartphones. There was much better news during the final quarter of 2013 for the consumer electronics sector which benefited from a welcome uplift in sales from the games consoles product group. The information technology sector began to suffer in quarter 4 due to price erosion in the media tablets product group as competition and new low price point models appeared on shelves.
The overall smart and mobile phones market is posting year on year declines for Q4 2013. This decline does continue to be driven by the large year on year declines of the prepay market and also the mobile phones market, however in Q4, year on year declines were also seen for the contract and smartphone markets. The only sector within the handset market that saw an increase in sales year on year was the SIM free market. When looking at smartphones within the SIM free market, we are seeing considerable growth year on year. Smartphones contributed to 90% of the value within the SIM free market in December 2013. We are also seeing a similar trend to that seen within the prepay market of smartphones moving down the price points. In December, over 58% of SIM free smartphone sales fell into the £50-199.99 price bracket.
Q4 2013 growth in total consumer electronics was positive for the first time in a long time. The major cause of this was the improved performance in games consoles. If these are stripped out from the total consumer electronics figure then the Q4 decline (compared to Q4 2012) is 9.4%. This is of course negative but is better than the annual total consumer electronics decline of 14%. December shows a fall of 6.2% so a further lessening of the rate of decline. This is caused by increasing sales of the very largest televisions, connected audio systems, sound bars and portable digital radios. Though many areas are in decline within consumer electronics, these current areas of growth should continue to perform positively across 2014.
The first nine months of 2013 were tough for the photo sector. This was then exacerbated by an even more negative Q4, where there was a 29% decline in value compared to Q4 2012. Superzoom cameras (fixed lens cameras with more that 10x optical zoom) and bridge cameras declined by 45% and 38% respectively in value year on year. As for changeable lens, CSC (compact system cameras) fell by an unprecedented 35% in value, whereas SLR (Single Lens Reflex cameras) managed to outperform standard point and shoot cameras, declining by only 28% in value compared to Q4 2013. Only the tripods category succeeded in enjoying some value growth this quarter, up 14% compared to Q4 2012. Looking ahead, we can only expect that the photo sector in Q1 2014 will suffer less than it did at the end of 2013.
Small Domestic Appliances
It has been a good year for small domestic appliances with floorcare, small kitchen and personal care categories contributing to a volume gain for Q4 on last year. The performance of personal care in particular represents a turnaround for the category which posted a weak Q4 last year. Wellbeing, dentalcare and haircare saw a combination of innovation and price promotion boosting sales. Higher end purchases also saw value grow to double digits across many areas with key Christmas gifts such as coffee makers rising by more than 20% on last quarter. The stand-out has been juicers which have seen a massive jump year on year thanks to lifestyle trends shifting back to healthy living and dieting. Q4 2013 also saw a material shift in consumer buying behaviour; online sales accounted for more than a quarter of all purchases compared to 11% last year. With “Black Friday” now likely to be a fixed point on the retailers calendar, the chances of internet sales growing further cannot be understated.
Data based on Small Domestic Appliances (Floorcare, Personal Care, Small Kitchen Appliances, Linen Care, Air Treatment, Linen Care, Wellbeing, Personal Diagnostics)
Major Domestic Appliances
Demand for major appliances declined for a third consecutive quarter. A saturated market and the anniversary of heavy sales last year thanks to a changing retail climate in the UK was largely responsible for the slowdown. Tumble dryers, refrigerators and freezers were among the worst hit categories and dryers saw a fall with a milder winter contributing to the lacklustre performance. The UK did see value growth continue as consumers who did replace traded up to premium products. Side by side refrigerators, upright freezers and washing machines with 7kg+ load capacities all saw positive trends in Q4 helping to lift overall major appliances to around 1.5%. With £907.6m, the last quarter has been the most valuable of the 2013 for the market. The trend for consumers paying more for their replacements is shown most clearly in average price increases of around 5% overall during Q4, the biggest jump of 2013.
Data based on MDA Total 8 (Washing Machines, Tumble Dryers, Dishwashers, Cooling, Freezers, Cooking, Hobs, Hoods)
The IT sector remained static overall in Q4 2013 with value down just 0.7% on Q4 last year. However there were shifts in how individual product groups performed. Tablets ceased to drive value growth, growing just 1.9% in value in Q4. This represents a maturing of this market which is still growing in volume. The value declines were caused by a significant increase in competition from 2012, especially at the entry level. Products complimenting tablets however enjoyed a strong Q4 2013. Keyboards grew in value by 21.5% but remained constant in volume, with the growth coming from the tablet keyboard sector. Similarly in networking repeaters and powerlines, both of which allow home networks to be extended, were up in both volume and value. As tablets slowed down, desktop computing experienced a resurgence, with growth in both volume and value. As tablet life cycles improve, consumers are looking to replace ageing desktops which can offer some functions tablets cannot. Media streaming devices saw big increases in Q4 2013 with new launches boosting the market. Volume grew more than value with price declines of 37.9%. This may represent a speeding up of the shift towards internet TV, which has been slowly growing over the past decade.
Office Equipment and Consumables
Over Q4 2013 the office equipment and consumables sector has experienced a slight decline in both value and volume. The downward volume trend is driven by multi-functional devices, inkjet cartridges and laser cartridges. These products are continuing to decline with technological advancements and consumers buying tablets and other devices, creating less need to print. The multi-functional devices experiencing growth are those which afford users convenience such as wireless and web-enabled models which command the premium prices. Stationery has been outperforming the office and consumables market, seeing a 3.4% value growth. The success of brands is helping drive up the value of the market, however the own labels are in decline with branded products being favoured by consumers. Some key product groups contributing to this growth are graphite pencils, highlighters and marker pens.