Toby Smith

Are Consumers Ready to Spend Again?

by Toby Smith   01/21/09

Consumer electronics remains one of the weakest spending categories. And while a seasonal decline in purchase intentions is expected after the holidays, spending is still severely lower than the level of a year ago.

Only 15% said they'll spend more on consumer electronics going forward, compared with 41% who said less -- a net six points worse than the previous survey, and 22 points worse than a year ago.

Home Entertainment Shopping: Next 90 Days

For the third consecutive survey, Amazon.com (AMZN) (up one point to 24%) is the clear momentum leader in home entertainment and networking shopping. The survey also showed encouraging results for Amazon's electronic reading device, the Kindle, with 2% of respondents saying they've already purchased one, and 58% of current owners saying they're very satisfied with the Amazon product.

Both Best Buy (BBY) (down six points to 37%) and Circuit City (CCTYQ) (down two points to 7%) show significant weakness going forward. There was a similar decline after the 2007 holiday season, but both are considerably lower than a year ago.

In another negative for Best Buy, only 6% said they'll spend more money there during the next 90 days -- one point less than last month. Thirty-nine percent said they'll spend no money there -- a 12-point jump to the highest reading to date.