Electronics spending plummets after weak Xmas

While CES continues to wow the hordes with its conveyor belt of shiny desirable goods, those expected to shell out for the latest Ultrabooks, tablets or 55 inch OLED tellies are struggling to pay for products at all.

The red suited fat-man was replaced by Wonga.com for delivering Christmas presents in 2011, and January is already considerably leaner than most.

According to GfK Group, the run up to Christmas did see some increases in electronic product sales, but that was in response to large discounts.  However, this increase in the run up to the festive season has drained funds usually set aside for consumer spending frenzies once the turkey has finally settled.

This situation has led to technology product sales dropping heavily in the week ending 31st December, compared to the previous year.  Sales of TVs were down 16 percent, games consoles by 21 percent, while satnavs dropped by 18 percent, according to the GfK figures.

While online sales saw a boost at the end of last year, reaching record levels once again, the contrast to the high street was stark. Even the attraction of heavily discounted goods did little to meet targets.

Prominent retailer Game, for example, announced this week that it was sorely hit by low sales, with share price plummeting as it admitted it may be in danger of breaching loan conditions.

Even in the surroundings of CES, the disparity between attempts to generate sales with mountains of seductive hardware and the real economic situation of the surrounding state of Nevada, one of the poorest in the USA, is a stark reminder of financial realities.

CES may be an institution in drumming up sales fervour, but it’s widely acknowledged that the industry faces a tough time as economies teeter towards recession.

And with no sign of financial instabilities abating it’s expected among analysts that the spending power of consumers will remain low into the rest of 2012.