The year 2023 was not a good one for the electronics retail sector: consumers in Germany made particular savings on household technology and consumer electronics. Despite higher prices, sales for technical consumer goods fell by 1.6 percent compared to the previous year, and for household appliances by 2.4 percent, as the market research institute NIQ announced. For comparison: Overall, private spending rose by 5.5 percent last year, driven by price increases for food and drugstore products.
However, according to the study, there are big differences in the area of technology and electronics: small household appliances such as deep fryers, hand vacuum cleaners, toasters, hair dryers and mixers ran better and increased slightly. However, business fell sharply for IT products – such as PCs, laptops and monitors – and televisions (minus eight percent) as well as large household appliances such as washing machines and dishwashers (minus six percent). Over the past year, according to NIQ, consumers have been more focused on only replacing defective products.
“Crisis mood and purchasing reluctance”
Sara Warneke, managing director of the industry organization gfu, is not surprised by the negative trend. “The general uncertainty and the economic situation are leading to a crisis mood among consumers and corresponding purchasing reluctance.” According to market researchers, industry sales in 2023 were significantly above pre-Corona levels, but electronics retailers had eleven percent less sales than in the previous year.
The dealers point to the exceptionally high sales in previous years as the reason. During the Corona period, consumers made and brought forward many purchases. As a result, sales volumes have recently fallen significantly. According to gfu, the number of televisions sold fell by 10.9 percent to 4.4 million units. Another dampener in sales was the increased prices. Smartphones, cameras and game consoles were on average more than ten percent more expensive than in the previous year.
Industry hopes for a better mood
Friedrich Sobol, board member of the ElectronicPartner group, which includes the EP specialist retailers and the Medimax stores, speaks of “challenging times”. Due to the economic situation, people have recently been buying more in the lower to medium price segment. The company Ceconomy, which includes Europe’s largest electronics retail chains Media Markt and Saturn, recorded a profit for the past financial year. In Germany, however, there was “lower customer demand”.
The industry association gfu expects the market situation to improve this year and is targeting an increase in sales of between one and two percent. Benedict Kober, CEO of Euronics Germany, does not expect a complete recovery in 2024. The reason for this is the weakening construction industry and uncertainty on the consumer side. “However, if consumer sentiment improves significantly, for example due to positive news from politics or major sporting events, there is reason for cautious optimism,” says Kober.
NIQ press release