While revenues declined in the first quarter of 2014 by 0.7% compared to quarter 1, 2013 the market appears to be taking an upward trend after the same quarter in 2013 experienced a value decline of 2.3%.
Australia’s economic results varied in quarter 1, 2014. Total retail spend, as reported by the RBA, was in growth, though consumer sentiment dropped to its lowest rate since quarter 4, 2012.
Among the categories that reported growth in 2014 were domestic appliances and IT based products recorded value growth of 4% and 3% respectively. In the IT category tablets was a major contributor to the rise in sales of PC based products.
Another big contributor was vacuum cleaners and food preparation products which justifies JB Hi Fi’s investment in their new Home Stores roll out.
GFK said that while the rate of growth in these categories was strong, it was not strong enough to counter the overall decline in Consumer Electronics (-6%) which was suffering due to a softening of demand for smartphones.
In the small domestic appliance market which was the fastest growth robot and hand-stick vacuums performed strongly with the more traditional canister and upright vacuums accounting for the largest value share of the category.
Also contributing to growth was the liquidisers segment. Smaller ‘on-the-go’ and soup-maker liquidisers are particularly in demand.
GFK claimed in their latest Temax report that a move by Australians to a healthier lifestyle was contribution to an increase in food processor products.
They said that this evident by the growth of low oil fryers despite the significant price premium they command.
GFK said that the decline in consumer electronics continued in quarter 1, 2014 due to a fall in demand for TV’s which the research group claims is by far the most dominant segment within this sector.
While demand for super large screens remained strong a third of all TVs purchased in Q1 were for TV’s sized 50″ or above.
With demand for large TV’s and new generation models featuring Ultra High Definition technology still in its early stages demand for 4K/UHD is starting to show strong revenue growth with retailers and TV vendors banking on the upcoming World Cup in Brazil to drive sales.
In the sound market wireless devices and sound bars that connect over a Bluetooth network, continued to perform well, accounting for half of all audio-generated revenue.
The increased number of brands and styles on offer, coupled with the increase in mobile device penetration have fuelled the popularity of this segment claims GFK.
They claims that this is a positive start to the year, despite underlying challenges.
The European research group warns that the beginning of 2014 has provided reason for cautious optimism, following a further stabilisation of the consumer electronic and IT sectors.