Electrical Retail Figures Record Slight Decline

For Department stores sales, the trend estimate fell by 0.2 per cent for August 
and the seasonally adjusted estimate fell by 2.9 per cent.

The trend estimate for Household goods retailing overall was relatively unchanged 
at 0.0 per cent, but the seasonally adjusted estimate fell by 0.8 per cent. 

The industry subgroup faring the best is the Hardware, building and garden supplies 
retailing with a rise of 0.3 per cent, followed by Furniture, floor coverings, 
houseware and textile goods retailing with a rise of 0.1 per cent.

GfK Technical Consumer Goods Market Findings

Backing up these ABS figures, the results from GfK’s TEMAX Index for the second 
quarter of 2014 showed the Australian Technical Consumer Goods (TCG) market 
recorded a revenue decline of -3.2 per cent. 

According to GfK, the growth in the Information Technology (IT) sector was not 
sufficient to balance the decline of Telecoms, Consumer Electronics and Small 
Appliances.

As GfK found, although the Australian TCG market was in overall decline, there 
were pockets of solid growth. IT continued its recent positive trend, led by a 
recovery in mobile computing and wireless connec-tivity devices, while Major 
Domestic Appliances (MDA) stabilised after a couple of consecutive periods of 
value decline.
 
The IT sector grew in the second quarter of this year, showing a 2 per cent value 
growth compared to the same period last year. The majority of segments within IT 
showed strong signs of recovery with most recording value growth.
 After a long period of value decline, mobile computing, the largest category 
within IT, was flat year-on-year. With sales of mobile computing playing an 
important role in the sales of computer peripherals, this recovery is likely to 
have a positive impact on the IT sector as a whole.
 
One key IT segment to show growth in the second quarter was wireless range 

extenders. Typically used to boost Wi-Fi signal at home, strong sales of these 

products indicate an increasing usage and focus on Wi-Fi within Australian homes.
 
Major Domestic Appliances
 
After two consecutive periods of value decline, the Major Domestic Appliances 
(MDA) sector stabilised in the latest quarter. Higher-priced, feature-rich 
products added value to the MDA sector, with value growth surpassing volume
growth during the quarter.
 
Within the dryers market, heat pumps and condenser heating models were catalysts 
for growth. With an average price four times that of standard dryers, the demand 
for heat pump dryers had a positive impact overall.
 
Another area of note within MDA was the rangehoods segment. Canopy/cartridge 
rangehoods grew significantly in the second quarter of 2014, accounting for 
nearly a fifth of the spend on this segment.
 
Telecommunications Challenge
 
The second quarter of this year was challenging for the Telecoms sector, with 
smartphones recording their second ever value decline.
 
The trend towards outright purchases continued in the second quarter. In fact, 
for the first time ever, the sales for smartphones purchased outright, or without 
any carrier attachment, outsold those purchased on prepay.
 
Bigger screens also continued to gain popularity. Focusing specifically on new 
smartphones launched in this quarter, nearly 90 per cent of sales were generated 
from models with a screen size of 5″ or larger.
 
Consumer Electronics: Large Screen Demand Continues
 
The value of the TV market continued its recovery in the second quarter. A slew 
of new ranges were released which were heavily focused on super-large screens, 
with a wide range of UHD/4K models (and a few curved) seeing strong initial 
sales. This continued shift towards premium TVs fuelled an overall average price 
increase. The average price for TVs reached its highest quarterly figure since 
the third quarter in 2010.
 
Interestingly, the impact of the FIFA World Cup – usually an event that generates 
a spike in large-screen TV sales – was minimal this year. The significant time 
difference between Australia and Brazil may have been a factor, but according to 
GfK, the general dominance of large-screen TV sales in the past year or two would 
also impact on the ability of the industry to generate incremental sales.
 
One of the stronger performing segments in recent times has been head-phones. 
This segment has experienced a significant slow-down in growth in the second 
quarter of this year, partly due to the plateauing of attachment categories such 
as smartphones and tablets. A year-on-year decline in the number of models 
available for sale, after several quarters of strong growth, provides further 
evidence of a maturing category.
 
Small Domestic Appliances (SDA)
 
According to GfK, a relatively mild start to the winter affected the heating-
related categories within SDA, as both electrical and gas heaters, as well as 

electric blankets, all showed a decline on last year. Vacuum cleaners, the 
largest category within SDA, did continue to grow, with the higher priced hand-
stick and robot sub-segments still driving overall vacuum market growth. Between 
them, these segments now account for over a third of the vacuum cleaner market.

Products promoting health are also continuing to drive the SDA sector. These 
include low-oil fryers and slow juicers, suggesting that consumers are willing to 
pay more than twice the price for kitchen appliances with health benefits.
 
Market Likely To Remain Flat At Best
 
GfK found the market for 2014 has already seen periods of recovery for the IT and 
Consumer Electronics sectors, but any pockets of opportunity have been 
overshadowed by decline elsewhere.
 
The performance of the Telecoms sector will play a large part in the overall 
health of the TCG market in the final quarters of the year. Expectations of a 
flat Telecoms sector will probably mean a flat performance for the TCG market as 
a whole.
 
All reports from GfK are available at www.gfktemax.com