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Tech Industry

No holiday cheer for sales

The latest numbers for PC sales are in, and Christmas notwithstanding, computer retailers are finding there's not a lot to cheer about.

The latest numbers for PC sales are in, and Christmas notwithstanding, retailers are finding there's not a lot to cheer about.

Electronics retailers today reported November sales were down over last year, in some cases by double digits. The industry pointed to less cash flowing in from computer related sales as contributing in part to the downturn.

Best Buy (BBY) and Circuit City (CC) reported sales at stores opened at least one year were down eight percent over the same time last year. Comparable store sales serve as a benchmark to gauge the health of a retail chain.

Denver-based Ultimate Electronics (ULTE) reported earlier this week its same store sales fell by a whopping 20 percent over last year.

"There was a lot of [price] discounting going on earlier this year because competitors were move existing inventory in order to make way for new models," said Laurie Bauer, a Best Buy spokeswoman.

The transition from the older computer technology to the newer models kicked in during November and December, whereas the transition last year occurred between January and February, she said. That discounting hurt revenues, despite attracting customers.

Analysts say PC sales will also be dampened as shoppers find there's nothing dramatically new on the shelves this year. They also note that about 40 percent of households have a computer and may not feel the need to double up on their technology.

Tandy (TAN) fared somewhat better than its competitors, with a two percent decline in comparable store sales. And its Computer City division actually posted a three percent gain over the previous year.

Analysts say Computer City and CompUSA (CPU) are likely to perform better this holiday season than electronics stores that don't specialize in computers and computer-related products.

The drop in comparable sales for electronics stores comes after Visa U.S.A. reported a 16 percent rise in sales over November 29 and 30 compared with the same period last year. Analysts speculate that the discrepancy can be accounted for by the fact that customers may be turning increasingly to their credit cards to make purchases rather than paying in cash or cutting a check.